Health Care Reform (ACA)
The Affordable Care Act (ACA) generally requires that individuals and their dependents have qualifying health care coverage that meets minimum value standards. This requirement is commonly referred to as the “individual mandate.” Swarthmore College’s health plans exceed the required minimum value standards set by ACA.
There are reporting requirements for employers to meet under ACA. A tax form called the 1095-C will be sent to all fulltime employees who are currently enrolled in any of Swarthmore College’s medical plans or who have been offered coverage under Swarthmore’s medical plans. Employers are required to send the 1095-C to employees by March 31, 2016, however, the College’s forms will be mailed to applicable employees by the end of February. Please note employees with coverage under Swarthmore’s medical plans will also receive a form 1095-B from Independence Blue Cross that will show you and/or your dependents medical coverage; it’s possible that you have already received this notice.
These forms should be retained as support for the responses required on your individual tax return, however, it is not required that the forms be submitted with your tax filing.
For more detailed information regarding the ACA, please see the “Frequently Asked Questions” below.
- What is the purpose of this form?
The purpose of Form 1095-C is:
- to provide you with information that may be helpful when preparing your 2015 personal income tax return;
- to provide the IRS with information to show that your employer is complying with the ACA (e.g., by offering certain health coverage); and,
- to report that you are also complying with the ACA (e.g., by having health coverage during the tax year).
Note: Form 1095-C is issued by your employer Swarthmore College.
The purpose of Form 1095-B is:
- to provide you with information that may be helpful when preparing your 2015 personal income tax return;
- to provide the IRS with information to show that your health care insurer is complying with the ACA (e.g., by reporting which type of insurance coverage you and/or dependents have and the period of coverage); and
- to report that you are also complying with the ACA (e.g., by verifying you and your dependents have qualifying health insurance coverage during the tax year).
Note: Form 1095-B is issued by your health care insurer, Independence Blue Cross.
- What is included on the form?
Form 1095 may include some of the following:
- the months during 2015 that you were offered employer provided or employer sponsored health coverage, and,
- for a full-time employee (as defined in the ACA), the single-only premium for the lowest cost, minimum value coverage option made available to you by your employer during each month of 2015
- Note: this may not be the health plan option that you actually enrolled in
- For example, you may have enrolled in the family coverage option and not the self-only coverage one.
While each individual’s situation may be different, if you had employer-provided or employer sponsored health coverage for all 12 months of 2015 that met the ACA requirements, essentially the form reports to the IRS that this is the case.
- How do I know the health coverage offered by my employer provided minimum value?
Minimum value means that the plan pays at least 60% of the costs of benefits. Swarthmore College’s health plans provide minimum value.
- Do I need to take action as an employee, and if so, what is the deadline?
You will need to provide information concerning your medical coverage on your individual tax return. Most individuals have to file their return by April 15, 2016. Please check with your tax advisor if you have any questions on filing your tax return.
- How can I identify the employee cost of self-only health coverage offered by Swarthmore College?
This is reflected on Form 1095-C, Line 15.
- If I have enrolled mid-month, how is that recorded on the Form 1095-C?
Part III will indicate that you had coverage for each month in which you were enrolled for at least one day.
- I am a full-time employee and had a prior employer in the same year, what should I be receiving?
You will receive a Form 1095-C from Swarthmore College for the period you were employed at Swarthmore College. Depending on the type of insurance offered by your prior employer, you should also receive a Form 1095 from them.
- If I change my health coverage during the year, and I end up with a gap when I am not covered, do I owe any taxes/penalties?
Individuals are treated as having coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three months, you may qualify for an exemption and not owe a payment. Please check with your tax advisor as to whether you may owe taxes or penalties.
- What documents do I need to keep handy for my income tax return?
You should keep the Form 1095-C as support for your responses on your IRS income tax return. It is not required to be submitted by you to the IRS. Swarthmore College will file Form 1095-C with the IRS. Please consult with your tax advisor as to how long you should retain this information in your files.
- When can I expect to receive my 2015 Form 1095-C?
Your Form 1095-C will be mailed by March 31, 2016.
- What do the codes mean on the form?
The Code Series 1 which are reported on Line 14 of Form 1095-C are:
Health Reform Act Code Explanations Indicator Codes Explanations 1A Qualifying Offer: This code means you are a full-time employee who received a qualifying offer from Swarthmore College. A qualifying offer is one that provides minimum essential coverage – provides for minimum value, is affordable and is offered to you and your dependents. 1B Minimum Essential Coverage(MEC)/Minimum Value(MV) to EE only 1C MEC/MV to EE and MEC to dependents (not spouse) 1D MEC/MV to EE and MEC to spouse (not dependents) 1E MEC/MV to EE, and MEC to spouse and dependents 1F MEC not providing minimum value 1G Offer of coverage to employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year. 1H No Offer of coverage 1L Qualifying Offer Transition Relief 2015
The Code Series 2 that are reported on Line 16 of Form 1095-C are:
- Employee not employed during the month. The employee was not employed on any day of the calendar month. Code 2A is not entered for the month during which an employee terminates employment with the employer.
- The employee is not a full-time employee for the month and did not enroll in minimum essential coverage if offered for the month. The employee is a full-time employee for the month and offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month).
- Employee enrolled in coverage offered. Code 2C is entered for any month in which the employee enrolled in health coverage offered by the employer for each day of the month, regardless of whether any other code in Code Series 2 (other than code 2E) might also apply (for example, the code for a section 4980H affordability safe harbor). Code 2C is not entered in line 16 if code 1G is entered in the All 12 Months Box in line 14 because the employee was not a full-time employee for any months of the calendar year. Code 2C is not entered in line 16 for any month in which a terminated employee is enrolled in COBRA continuation coverage (enter code 2A).
- Employee in a section 4980H(b) Limited Non-Assessment Period. Code 2D is entered for any month during which an employee is in a Limited Non-Assessment Period for section 4980H(b). If an employee is in an initial measurement period, code 2D is entered (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the employer is also eligible for the multiemployer interim rule relief for the month, code 2E is entered (multiemployer interim rule relief) and not code 2D (employee in a Limited Non-Assessment Period).
- This code is used for any month during which the employee is covered under a third party plan such as a union-sponsored plan.
- Section 4980H affordability Form W-2 safe harbor. Code 2F is entered if the employer used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an employer uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage.
- Section 4980H affordability federal poverty line safe harbor. Code 2G is entered if the employer used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s).
- Section 4980H affordability rate of pay safe harbor. Code 2H is entered if the employer used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s).
- Will I need to file an income tax return to get a premium tax credit?
We cannot respond to any questions concerning obtaining a premium tax credit. Please contact your personal tax advisor.
- I am not filing a tax return this year, what do I do with this Form?
You should keep this Form with your personal tax information. It is not required to be submitted by you to the IRS. Swarthmore College will file the 1095-C with the IRS. Please consult with your tax advisor as to how long you should retain this information in your files.
- My name is spelled wrong or I changed my name, will I need a corrected form?
Please provide the correct spelling of your name so that I can compare it to what we have for you in our system and to what was reported on the Form 1095.
Although your name is misspelled, it will not impact the filing of your individual return since the Form 1095 is not filed as an attachment to your individual income tax return. The IRS will use your social security number as the identifier – is this number correct? Swarthmore College will file a corrected form with the IRS and you will receive a corrected form for your files.
- My SSN is incorrect, will I need a corrected form?
Please provide the correct social security number so that I can compare it to what we have for you in our system and to what was reported on the Form 1095.
Although your SSN is incorrect, it will not impact the filing of your individual return since the Form 1095 is not filed as an attachment to your individual income tax return. Swarthmore College will file a corrected form with the IRS and you will receive a corrected form for your files.
- The address on the form is not my current address, will I need a corrected form?
Please provide your current address so that I can compare it to what we have for you in our system and to what was reported on the Form 1095.
Although the address reported on the Form 1095 is different than your current address, it will not impact the filing of your individual return since the Form 1095 is not filed as an attachment to your individual income tax return. You will not receive a corrected form for an address change.
- I think the code(s) on the form are incorrect, will I need a corrected form?
Which code do you believe is incorrect and why?
We will need to look into this and get back to you. If it is determined that the codes reported on your form are incorrect, we will provide a corrected form to you.
- I have received a corrected Form 1095-C after I filed my individual income tax return. Do I need to amend my return?
Please check with your tax advisor with regard to whether your return should be amended.
- I lost my Form 1095-C, how can I obtain another?
We would be happy to provide another form to you. The Human Resources Office will confirm your name and address and we will initiate a request to get a hardcopy mailed to you via first-class mail.
- I never received Form 1095-C, how can I get one?
Let’s first determine if you should have received a Form 1095. Are you a full-time employee or a part-time employee receiving coverage from Swarthmore College?
NO: then a Form 1095 is not required to be issued to you. IRS requires that Swarthmore College only files Forms 1095 for its full-time employees or anyone that receives coverage from a self-insured Swarthmore College health plan. If you have health coverage that you receive from a spouse’s employer, the exchange or that you have purchased privately, then you will be receiving a form from that provider.
YES: you should have received a Form 1095.
• I see a form was prepared and issued. We can send another form to you a hardcopy via first-class mail.
• I do not see that a form was prepared for you. Let me confirm some information so that we can look into the specifics to determine why a form was not prepared for you. Are you considered a full-time employee – meaning are your scheduled or actual hours 30 or more per week? Do you currently receive coverage from a Swarthmore College provided health plan? How long did you work for Swarthmore College in 2015?
ABOUT THE ACA
- What is the ACA employer shared responsibility provision?
Employers decide if they want to offer affordable Minimum Essential Coverage (“MEC”) that provides minimum value to their full-time employees and their dependents, or risk being assessed shared responsibility payments by the IRS. Depending on its decisions about offering MEC to its full-time employees and their dependents, an employer may be subject to one of two potential employer shared responsibility payments.
- How do I know the health coverage offered by my employer provides minimum value?
All of Swarthmore College’s health plans provide minimum value. Minimum value means that the plan covers at least 60% of claims.
- Are children subject to the individual shared responsibility mandate?
Each child must have Minimum Essential Coverage or qualify for an exemption for each month of the calendar year. If you have any questions concerning the shared responsibility rules pertaining to dependent children please contact your personal tax advisor.
- Can I purchase coverage from the Exchange for a lower price for myself, spouse and/or dependents?
You can purchase healthcare coverage from any source you choose: Swarthmore College, private insurance, from the marketplace, etc. The marketplace or “Exchange” is the Government (Federal/State) website that provides options for purchasing coverage. If you are looking for a lower cost, you would need to compare what is being offered from these different sources. If you are already covered under Swarthmore College health coverage, you can only decline coverage at the next annual open enrollment unless you have a qualifying life event.
- Where can I find Marketplace information?
www.healthcare.gov will provide information and links to the state exchanges.
- I don’t think my health coverage is affordable. How was this calculated?
We are required to use the IRS’s methods for determining whether coverage is affordable. Affordability is calculated by starting with the lowest cost of self-only coverage that was offered to you – keep in mind this may not be the coverage that you elected. In order to be affordable, this lowest cost of single only coverage must be 9.5% or less than the wages reported in box 1 of your Form W-2.
- The premium that I pay is higher or lower or is more than 9.5% (as indexed for inflation) of my Form W-2 wages, how did you calculate affordability?
Affordability is determined by ACA standards by using the lowest cost self-only premium that is offered to our employees – which may be different than the coverage you selected. Swarthmore College qualified for the Federal Poverty Line safe harbor. This means that to be affordable, the coverage is equal to or less than $92.39 per month for 2015. Swarthmore College’s lowest cost single-only coverage meets this threshold.
- My share of premiums is higher for family coverage compared to self-only coverage, does this meet the affordability requirements?
Affordability is determined under ACA rules and is based on the lowest cost self-only coverage, regardless of what coverage you have selected.
MINIMUM ESSENTIAL COVERAGE
- Is my coverage Minimum Essential Coverage? What is MEC?
Yes, Swarthmore College’s coverage provides Minimum Essential Coverage (MEC). MEC is qualifying health coverage. You are considered to have MEC for the entire month as long as you are enrolled in a plan or program that is MEC for at least one day during that month.
- Most health insurance coverage provided by an employer,
- Health insurance purchased through the Health Insurance Marketplace (“Marketplace”),
- Coverage provided under a government-sponsored program (including Medicare, Medicaid, and health care programs for veterans),
- Health insurance purchased directly from an insurance company, and
- Other health insurance coverage that is recognized by the Department of Health & Human Services as MEC.
OTHER EMPLOYEE CLASSIFICATIONS
- I am a retiree, should I be getting the Form 1095-C?
For the year you retire you will receive a Form 1095-C from Swarthmore College that reports part of the year as an employee. Following that, you would only receive any Forms from the health insurance provider for which you may have a medical option under a Swarthmore College sponsored plan.
- I retired last year, what do I do with this Form?
You should keep the Form 1095-C as support for your responses on your IRS income tax return. The Form is backup support, much like a W-2 for your tax return. Please consult with your tax advisor as to how long you should retain this information in your files.
- I am enrolled in COBRA, should I be getting the Form 1095-C or Form 1095-B?
For the year you end employment you will receive a Form 1095-C from Swarthmore College that reports part of the year as an employee. Following that, you would only receive a Form 1095-B from the health insurance provider, if you are enrolled in a Swarthmore College sponsored plan for COBRA coverage.
- What action needs to be made for a deceased employee?
A deceased employee will receive a Form 1095 from Swarthmore College for the period they were an employee. This will need to be referenced when completing the final tax returns for this individual.
- Who should I contact if I have additional questions?
If you have additional questions, please contact the Human Resources Office at email@example.com or call (610) 328-8397.