Understanding Part II & III on Form 1094-C
IRS Form 1094-C
Form 1094-C is a transmittal form that must be filed to the IRS along with Forms 1095-C. It is used as a cover sheet and summary of the information being filed.
For employers, Form 1094-C, combined with Forms 1095-C, is used to determine whether an Applicable Large Employer (ALE) owes an employer shared responsibility provision (ESRP) payment under IRS section 4980H.
Form 1095-C provides information regarding health coverage offered by an employer for each employee to both the IRS and the employees. A form must be completed for each individual that was a full-time employee for any month of the calendar year, and must be provided to each individual. For employees, this form is used in determining eligibility for the premium tax credit.
Form 1094-C, Part II – ALE Member Information
This section includes the following boxes to report information:
- Box 20 – Total number of Forms 1095-C filed by and/or on behalf of ALE Member
- Box 21 – Is ALE Member a member of an Aggregated ALE Group? Checkbox
- Box 22 – Certifications of Eligibility Checkbox
- Qualifying Offer Method – To use this option, the employer must certify that it made a Qualifying Offer to one or more of its full-time employees for all months during the year in which the employee was a full-time employee for whom an employer shared responsibility payment could apply.
- D. 98% Offer Method – To use this option, the employer must certify that it offered affordable health coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C employee statement. This takes into account all months during which the individuals were employees of the employer and were not in a Limited Non-Assessment Period. The employer must also certify that it offered minimum essential coverage (MEC) to those employees’ dependents.
Form 1094-C, Part III – ALE Member Information – Monthly
This section gives more information about the ALE Member and is split into 13 lines. It gives the IRS more details regarding the offer of coverage and monthly head-counts for the ALE member throughout the year. Complete either Line 23 – All 12 months, OR Lines 24 – 35 – January through December. These lines have 5 columns of data that should be complete.
Column (a) – Minimum Essential Coverage Offer Indicator
This column is used to indicate the months in which the ALE Member offered minimum essential coverage to at least 95% of its full-time employees and their dependents.
- For the months, if any, the ALE Member did not meet these requirements, select the “No” indicator checkbox for each applicable month.
- For the months, if any, the ALE Member met these requirements, select the “Yes” indicator checkbox for each applicable month.
Column (b) – Section 4980H Full-Time Employee Count for ALE Member
Please note: If you qualify for the 98% offer method, you can skip this. (The BoomTax interface will automatically hide this column if you select the 98% offer method earlier in the process.)
Column (c) – Total Employee Count for ALE Member
This column is used to list the total number of employees for the ALE Member for each month of the year. This count should include all employees: full-time employees, non-full-time employees, employees in an LNAP, etc.
An employer must choose to use one of the following days of the month to determine the number of employees per month and must use that day for all months of the year:
- The first day of each month;
- The last day of each month;
- The 12th day of each month;
- The first day of the first payroll period that starts during each month; or
- The last day of the first payroll period that starts during each month (provided that for each month that last day falls within the calendar month in which the payroll period starts).
Column (d) – Aggregate ALE Group Indicator
Select every month in which the ALE member was part of an aggregate ALE group. Then complete Part IV regarding other members of the aggregate ALE group.
Please note: This is grouped with Part IV: Aggregate ALE Group in the BoomTax interface.