Wednesday, June 1, 2016

How to Report COBRA on ACA Forms

When you’re working on your ACA Forms 1094 and 1095, you might run into a situation where you’ll need to report COBRA coverage information for your employee and/or their spouse and dependent(s). COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, the federal law that provides workers with the right to continued coverage in a group health plan.

How you report this COBRA coverage will depend on whether your employee enrolls in the coverage and whether the employee was offered coverage because of termination or a reduction in hours. If the employee doesn’t enroll in COBRA coverage, that’s easy enough: you’ll report no offer of coverage beginning with the month the employment was terminated throughout the remainder of the year on Form 1095-C, Part II. In order to avoid penalties for those months, you’ll code the former employee as not a full-time employee (Code 2B).

Now, if your former employee does enroll in COBRA coverage, you’re going to have to indicate that you made an offer of coverage for all the months the employee was covered, those under the original group plan and the ones the employee enrolled in COBRA. Use the same code indicator for all of these months. Your cost of coverage should change in this section from the lowest cost employee-only premium to the COBRA single premium.

If the individual is still employed and they’ve accepted your offer of COBRA coverage as a result of a reduction in hours, you’ll still report that an offer of coverage was made for all the months under the original group plan and COBRA. Even if the ongoing employee didn’t enroll in the COBRA coverage, you’ll need to report your offer. Your indicator codes - which will be different for the months the employee’s hours were reduced - will alert the IRS as to why the COBRA single premium is listed for the months COBRA was offered.

You can e-file your 1095-C Forms (COBRA offers and all!) with ExpressIRSForms. Just log into your account and select the ACA Forms option to get started. If you have any questions, you can give us a call Monday through Friday, 9:00 a.m. to 6:00 p.m. EDT, at (704) 684-4751; or send us an email anytime at

Looking for something a little less hands on? Check out ExpressACAForms, our full-service ACA e-filing solution.

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