Friday, June 10, 2016

Reporting Safe Harbor & Affordability on Line 16 of Form 1095-C

A couple of slots down from Line 14 on Form 1095-C is Line 16, as is usually the case with sequential numbers. The thing about Line 16 is that not everyone will fill it out. Read on to learn more about this reporting requirement.

Form 1095-C, Line 16
The thing to keep in mind about Line 16 is that you’ll only fill it out if certain situations apply for the employee (i.e., the employee not being full-time or employed at all) or for you, as the employer (i.e., Safe Harbor relief eligibility), during any month of the year.

ACA Code Series 2
The following Safe Harbor Codes are used on Line 16 of Form 1095-C:
  • 2A: Employee was not employed during this month.
    • If the employee worked even one day that month, Code 2A is not applicable.
    • Code 2A may not be used for the month an employee resigns.
  • 2B: Employee is not a full-time employee.
    • Use Code 2B for a non-FTE who didn’t enroll in coverage that month (if offered).
    • Use Code 2B for FTEs whose coverage ended before the last day of the month because the employee resigned (otherwise, the coverage would’ve continued).
    • Use Code 2B for January 2015 if you offered MEC with MV to the employee no later than the first day of the first payroll period beginning that month.
  • 2C: Employee enrolled in coverage offered.
    • Code 2C should be used even if another code might apply (other than 2E).
    • Don’t use Code 2C if Code 1G is entered in the “All 12 Months” box on Line 14.
    • Don’t use Code 2C for any month a terminated employee is enrolled in COBRA (use Code 2A instead).
  • 2D: Employee in a section 4980H(b) Limited Non-Assessment Period
    • Use Code 2D for any month the employee is in a Limited non-Assessment Period for section 4980H(b).
    • If Code 2E is also applicable, use that instead of Code 2D.
  • 2E: Multiemployer interim rule relief.
    • Use Code 2E for any month the multiemployer arrangement interim guidance applies to the employee.
    • Code 2E should be used regardless of any other code that may apply.
  • 2F: Section 4980H affordability Form W-2 safe harbor.
    • Use Code 2F for any month you used the section 4980H Form W-2 safe harbor to determine affordability for the employee’s coverage.
  • 2G: Section 4980H affordability federal poverty line safe harbor.
    • Use Code 2G for any month you used the section 4980H affordability federal poverty line safe harbor to determine affordability for coverage.
  • 2H: Section 4980H affordability rate of pay safe harbor.
    • Use Code 2H for any month you used the section 4980H affordability rate of pay safe harbor to determine affordability.
  • 2I: Non-calendar year transition relief applies.
    • Enter Code 2I if non-calendar year transition relief under section 4980H(b) applies to this employee for any month.

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