Employee BenefitsHealth InsuranceSmall BusinessTaxes

Is my small business required to file Form 1095?

Form 1095 is a new informational tax return that is a requirement incorporated into of the Affordable Care Act. Some small businesses are required to file it for the first time this season.

There are three types of Form 1095:

1095A from a Health Insurance Marketplace

1095B usually from an employer (the form discussed below that applies to some small businesses)

1095C usually from an insurance company

Form 1095B that is a required filing for tax year 2015 for small businesses with self-insured plans that: a) provided essential health benefits, and, b) covered more than one employee. For example, a Health Reimbursement Arrangement (HRA) plan that covered only dental benefits for a company with 10 covered employees, for example, does not need to file. Likewise a HRA providing primary health benefits for only one employee does not need to file.  Self-insured plans include both premium reimbursement plans (regardless of whether the reimbursement payment was made pre-tax or after-tax) and also medical expense reimbursement plans. A Medical Expense Reimbursement Plan  (MERP) that covered 2 workers in a 3 person company would be required to file a Form 1095B.

If you are still not sure then it makes sense to get expert advice. (If you are a small business owner without access to expert employee benefits advice please consider the flat fee service that I offer).  The penalty for failure to file Form 1095 is $250 per employee. The IRS has stated that no penalty relief will be available to employers that make no effort to file Form 1095. The filing deadline for providing Form 1095B to employees  was moved back to March 31, 2016.

(Note that this post does not cover other related issues especially the related issue of Form 1094 filing requirements. This post does not cover reporting issues for employers with 50 or more employees).

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