Your 1095-C Forms from Ascentis
Understanding the Patient Protection and Affordable Care Act (PPACA) and the annual reporting requirements requires detailed
knowledge of tax and legal issues. Ascentis strongly recommends your organization seek out professional services from your
insurance brokers, legal counsel or other professional advisors. It is incumbent that the Client validate the accuracy of all data prior
to publishing 1095-Cs and filing with the IRS. Ascentis relies on the Client providing accurate information, as well as auditing all
outputs of the ACA process, and at no time shall Ascentis, assume any liability from inaccuracies in the 1095-C’s, 1094-C, or from any
errors, flaws, failure, or fault of the software which would cause it to produce an incorrect or unexpected result.
Contents
Overview ................................................................................................................................................................................. 2
Who Gets a 1095-C? ............................................................................................................................................................... 2
How Many Forms Will an Employee Get? .............................................................................................................................. 2
Form Details – Part I ................................................................................................................................................................ 3
Form Details – Part II ............................................................................................................................................................... 4
Line 14 ................................................................................................................................................................................. 5
Line 15 ................................................................................................................................................................................. 7
Line 16 ................................................................................................................................................................................. 8
Form Details – Part III ............................................................................................................................................................ 10
Prerequisite Setup................................................................................................................................................................. 11
Validate Data ..................................................................................................................................................................... 11
Perform ACA-specific Setup Tasks .................................................................................................................................... 12
Processing & Publishing ........................................................................................................................................................ 16
Distribution to Employees .................................................................................................................................................... 21
Employee Access ............................................................................................................................................................... 21
Administrator View ........................................................................................................................................................... 22
Ascentis ACA Client Portal..................................................................................................................................................... 22
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Overview The Affordable Care Act (ACA) requires that certain employers offer medical insurance coverage to full-time employees
and their dependents. For all employees eligible for medical coverage, those employers must provide an annual
statement explaining the available insurance. The 1095-C form is that statement. For complete details on the form and
related information, see http://www.irs.gov/uac/About-Form-1095-C. For Ascentis HR customers who have purchased
our ACA year end reporting solution, this document describes our approach to the 1095-C and your steps to perform.
Who Gets a 1095-C? Ascentis will generate a 1095-C form for each employee who meets these criteria:
Social Security Number entered, AND
At some point during 2015, Full Time status (per ACA definition) OR enrolled in self-insured plan
If terminated, must not be archived
Prerequisite Setup
Ascentis provides a screen for you to map your existing HR employment statuses to the standard ACA status codes required for reporting
How Many Forms Will an Employee Get? An employee receives a 1095-C form per employer during 2015. If an employee was active in multiple HR companies in
2015, then a separate form will be provided for each. And if the employee moved between multiple EINs within the
same HR company in 2015, then a separate form will be provided for each EIN.
Prerequisite Setup
Each employee is assigned a single Payroll Directory or Payroll Code at a time in HR. Ascentis provides a screen for you to define EINs you must report for ACA, and then map those existing PR Directories or Codes to the EINs. The end result is that each employee is assigned to one or more EINs for 2015 for the purpose of ACA reporting.
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Form Details – Part I Let’s review the actual 1095-C form, line by line, so you can understand the information derived by Ascentis.
Employee Header Information
The first six lines of Part I capture basic information for the employee receiving the 1095-C. This is simply the data stored
on the employee’s Personal tab in Employee Manager.
Employer Header Information
The next seven lines of Part I record key information for the employer providing the 1095-C.
Prerequisite Setup
The EINs to Report screen is available to define employer information for ACA reporting purposes. There you will define these values for lines 7 – 13 as well as dictate how employees are grouped into EIN(s).
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Form Details – Part II Part II is the meat and potatoes of the form; this section displays the offers of coverage and related information for
premium amounts, safe harbors, and types of relief for the employer. This is the content of particular interest to the IRS.
Your Ascentis benefits plans and employee data are inputs to a series of criteria and calculations to derive these values.
Prerequisite Setup
In addition to the employee ACA status mapping step noted earlier, Ascentis provides screens to perform two other critical setup steps to drive this section:
Plan inventory – determine which of your Ascentis health plans to include, and of those which are self-insured, provide Minimum Value, and provide Minimum Essential Coverage
Periods – define the durations of your Administrative Period and Measurement Period
Be sure to view the IRS website and instructions for guidance on this setup.
The top of this section includes a Plan Start Month box; it is optional for 2015 reporting, and Ascentis is not populating it
this year. (It is expected to become a requirement next year.)
The rest of Part II is comprised of Lines 14 – 16:
For each calendar month, the applicable code is entered. If the same code applies for all 12 calendar months on a line,
the code is entered in the All 12 Months column and the individual calendar month boxes are left blank.
For each of these lines, this document explains how Ascentis leverages your setup and data and applies IRS guidelines to
determine the values to display.
Tip
The IRS instructions can potentially be interpreted differently for specific scenarios. Ascentis has built system logic to reflect our interpretation. But to ensure you have maximum flexibility for the forms you finally generate, we provide you with a screen to preview the system-determined Part II codes for any employee and manually override the default codes we have determined if you see fit after reviewing any situational questions with your professional advisors.
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Line 14 This line reports the employer’s offer of coverage to the employee.
1-Series Codes
These are the possible codes to display in Line 14, listed alphabetically:
Code
The Employee…
The Benefit Plan…
1A Is in ACA Full Time status, AND
Is offered coverage (i.e., eligible)
Provides Minimum Value, AND
Provides Minimum Essential Coverage, AND
Is affordable, AND
Offers coverage to employee + spouse + dependents
1B Is in ACA Full Time status or Other
Employee status, AND
Is offered coverage
Provides Minimum Value, AND
Provides Minimum Essential Coverage, AND
Offers coverage to employee only
1C Is in ACA Full Time status or Other
Employee status, AND
Is offered coverage
Provides Minimum Value, AND
Provides Minimum Essential Coverage, AND
Offers coverage to employee + dependents
1D Is in ACA Full Time status or Other
Employee status, AND
Is offered coverage
Provides Minimum Value, AND
Provides Minimum Essential Coverage, AND
Offers coverage to employee + spouse
1E Is in ACA Full Time status or Other
Employee status, AND
Is offered coverage
Provides Minimum Value, AND
Provides Minimum Essential Coverage, AND
Offers coverage to employee + spouse + dependents
1F Is offered coverage Does not provides Minimum Value, AND
Provides Minimum Essential Coverage
1G Is in ACA Other Employee or ACA Non-
Employee status for all of 2015 (i.e., not Full Time for any month), AND
Is enrolled in plan
Is self-insured
1H No offer of coverage at all, OR
Does not provide Minimum Essential Coverage, OR
Enrolled in multi-employer plan
1I Is in EIN which has Qualifying Offer Method Transition Relief
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Code Hierarchy
What if an employee meets the criteria for more than one code in the same month? In those cases, Ascentis will pick the
code based on this logic:
1. 1A – represents qualifying offer and trumps any conflicting code
2. 1G
3. 1I
4. 1B – 1E
5. 1H
6. 1F
For example, based on hierarchy above, if an employee qualified for 1I and 1F in the same month, 1I would display in
Line 14 for the month because it is higher on the list. The exception is that if an employee is in a multi-employer plan for
a month (which results in code 2E on line 16), then 1H must be displayed in line 14.
Mid-year Employment Changes
What if an employee gains eligibility during the year (for example, a new hire or someone changing from part-time to
full-time)? For the months in 2015 prior to being eligible, the code of 1H will represent no offer of coverage. And then
once offered coverage, the appropriate code will be displayed for each month per the criteria noted above.
Tip
The IRS instructions say “An employer offers health coverage for a month only if it offers health coverage that would provide coverage for every day of that calendar month.” So if an employee becomes eligible on March 1, then January – February get 1H, and March – December get the appropriate code based on what is offered. But if the employee becomes eligible on March 15, then January – March get 1H (because coverage as not offered for all of March).
What if an employee loses eligibility during the year (for example, a termination or someone changing from full-time to
part-time)? The same tip as above about “every day of that calendar month” still applies here, but there is nuance in
how COBRA continuation is considered:
If the employee loses coverage through termination, then COBRA is not considered for the 1095-C. Whether
the former employee enrolls in COBRA or not, any months after eligibility is lost get 1H for no offer.
If the employee loses coverage through reduction in hours, the COBRA is considered and the offer of
coverage via COBRA is used to determine the appropriate code per criteria above.
Prerequisite Setup
For COBRA benefits to be considered for 1095-C codes, the individual must be enrolled in COBRA in Ascentis HR.
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Line 15 This line is only completed for individuals who received 1B – 1E for any month(s) in Line 14.
Rather than a series of codes like Lines 14 and 16, Line 15 displays a dollar amount. This amount represents the
employee share of the lower cost monthly premium for employee only coverage offering Minimum Value and Minimum
Essential Coverage.
Note this is unrelated to the coverage the employee is actually enrolled in; this is about what is available to the
employee and meets the criteria above.
Example: An employee is enrolled in full family coverage in a PPO plan at a cost of $500 per month in payroll deduction,
but that employee has the option enroll in employee only coverage in an HMO plan offering MEC and MV at $100 per
month out of her paycheck, then $100 is reported in Line 15, not $500.
Tip
Zero is not the same as blank in Line 15. Zero displays for a month when the employee had a code 1B – 1E in Line 14, and the employee share for the lowest cost is $0.00, i.e. the employee doesn’t have to pick up any portion of the premium. A blank box in Line 15 indicates nothing needs to be reported for the month.
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Line 16 Whereas Lines 14 and 15 present what is offered to the employee, Line 16 is based on actual enrollment or safe harbor
relief where appropriate.
2-Series Codes
These are the possible codes to display in Line 16, listed alphabetically:
Code
Criteria to determine code
2A Not employed on any day of the calendar month
2B Not a ACA Full Time employee AND offered Minimum Essential Coverage AND did not enroll, OR
Mid-month end of coverage based on termination (e.g. if employee terminated March 15 and benefits coverage ends before March 31, then 2B for March)
2C Enrolled in coverage offered
2D
In an initial measurement or waiting period up to 3 calendar months after hire (e.g. if employee started March 15 and is eligible on May 1, then 2D for March + April)
In a limited non-assessment period, based your definition in Ascentis of the ACA Measurement and Administrative Periods (e.g. On Periods form, you defined 4 months for Measurement Period and 2 months for Administrative Period. Employee is hired February 10. Limited non-assessment period (months when 2D will display on Line 16 for employee) are February (first month of employment) + March – June (measurement period) + July – August (administrative period).
2E Enrolled in plan flagged on Plan Inventory screen as multi-employer plan AND affordable AND offers Minimum Value
2F Plan determined as affordable per W-2 safe harbor, AND
Employee declined to enroll
2G Plan determined as affordable per Federal Poverty Line safe harbor, AND
Employee declined to enroll
2H Plan determined as affordable per Rate of Pay safe harbor, AND
Employee declined to enroll
2I
Used for any months before start of 2015 plan year if other than January 1, AND
Plan is affordable, AND
Plan provides Minimum Value
Example: If affordable, Minimum Value plan year started April 1, 2015, employees may get 2I for January – March.
Blank Employee has 1A in Line 14, OR
No Line 16 code criteria apply (Line 14, but not Line 16, is required to have all months represented)
Tip
1A will be the most common value reported in Line 14. Since that requires no code reporting in Line 16, you may see a lot of blank boxes in Line 16. The IRS treats Line 16 as exception reporting and doesn’t expect every box to be filled as on Line 14.
Page 9
Code Hierarchy
What if an employee meets the criteria for more than one code in the same month? In those cases, Ascentis will pick the
code based on this logic:
1. 2E
2. 2C
3. 2I
4. 2D
5. 2B
6. 2A
7. 2F
8. 2G
9. 2H
For example, based on hierarchy above, if an employee qualified for 2C and 2D in the same month, 2C would display in
Line 16 for the month because it is higher on the list.
Mid-year Employment Changes
What if an employee gains or loses eligibility during the year? The same approach applies as noted for Line 14 above in
terms of which months are treated as non-employee months and how COBRA is handled.
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Form Details – Part III This is the final section of the 1095-C form. Part III is only completed when the plan is self-insured and is not a multi-
employer plan.
Prerequisite Setup
On the Plan Inventory screen, you will indicate which health plans are self-insured and which are multi-employer.
For such plans, all covered individuals will be listed starting in Line 17 in this sequence:
Employee
Spouse
Children, in order by DOB starting with earliest
Columns (a) – (c) is straightforward information from the employee and dependent data in Employee Manager.
Columns (d) – (e) will display an X for each month in which one of the listed individuals is enrolled.
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Prerequisite Setup Throughout the previous sections explaining the data presented on the 1095-C and how Ascentis derives it, you saw
several references to prerequisite setup. Below is a single summary list of the setup steps you must perform to ensure
the 1095-C forms are accurate. Consider this a checklist as you prepare for publishing the 1095-C forms.
Validate Data
Employee & Dependent Data
Parts I and III of the form show basic employee information like name, SSN, and address. Ensure that data is current in
Employee Manager. Some common scenarios not to overlook include:
• Employees that were active as of Jan. 1, 2015
• New hires for 2015 from date-of-hire
• Dependent(s), including social security number(s)
• Retirees who are still on your plan
• Owners, directors, partners... anyone who is enrolled in your plan
• Union members if they are enrolled in your plan, or if you are required to contribute to their plan
Also, remember that terminated employees who have been archived will not be considered in ACA reporting. So be sure
that you un-archive anyone who should receive a 1095-C.
Employment Status
ACA reporting is all about the status of the employee and determining if they are full-time or part-time under the ACA
definition. This “ACA Status” drives both who gets a 1095-C and Offers of Coverage codes reported on Line 14. Thus it’s
important to validate the Employment Statuses of your employees, including the effective dates, for all of 2015.
Benefits Eligibility Data
The Offer of Coverage codes on Line 14 of the 1095-C are also driven off of the Eligibility Rules for your Medical Plans.
Therefore it’s important to validate the Eligibility Rules for your Medical plans are correct for all of 2015.
Benefits Enrollment Data
You already have these defined for your ongoing benefits enrollment needs. Keep in mind that COBRA coverage and
enrollments must be entered in Ascentis to be used in criteria for Part II lines, specifically for situations when an
employee lost coverage through reduction in hours and was offered COBRA. Validate that your enrollment data is
correct for all of 2015.
Payroll Directory/Code
Since the EIN considered for each employee is based on the Payroll Code/Directory entered as part of the employee
compensation record, all such employee changes during 2015 should have been entered with an effective date on the
employee compensation record.
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Perform ACA-specific Setup Tasks
Accessing the Setup Forms
The ACA menu will appear for the administrator under Settings:
After selecting Setup from the menu, you will see these tabs:
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Periods Tab
On this tab, define the Measurement Period and Administrative Period you will use:
The values in the drop-down list for each field represent a number of months, and you will find all options allowable by
the IRS. Ascentis has also built in logic where applicable, such as the IRS rule that if you use a 12-month Measurement
Period, then you must use a 1-month Administrative Period (such as the example above)
Plan Inventory Tab
In the left column of the table on this tab, you will see all of your active medical plans listed. Indicate which plans should
be included in ACA reporting, and of those which are self-funded, multi-employer, offer Minimum Essential Coverage,
and/or offer Minimum Value.
ACA Employee Status Tab
This tab lists all of your employment status codes and enables you to map each to one of the three standard ACA
statuses used for reporting.
Medical Plan A
Medical Plan B
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EINs to Report Tab
First, add each EIN you are including in ACA reporting.
Next on this same tab, you will see all of your existing Payroll Code or Directory codes. Map each of those to one of the
EINs you have created. This is critical because it determines how each employee is assigned to an EIN (recall that EIN is a
box to populate for the employee in Part I of the 1095-C).
Tip
What if an employee moved from EIN1 to EIN2 during 2015? The employee should receive two separate 1095-C forms, one for each EIN. Since the EIN considered for each employee is based on this Payroll Code/Directory mapping, all such employee changes during 2015 should have been entered with an effective date on the employee compensation record. Otherwise, the system will be unable to determine when – or if – the employee actually moved between EINs and thus not correctly generate two 1095-Cs.
After that mapping, the final step on the tab is define details for the EIN (ALE Name, Address, Contact, Eligibility
Certifications, etc.) which are inputs for the 1094-C form.
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ACA Widget
Outside of those tabs under the Setup menu, you must also perform a setup step in the ACA Affordability Widget, which
the administrator can find under the Widgets menu in Setting:
In the ACA Affordability Widget, define these parameters, which will be used in calculating Line 14 and Line 16 codes
which consider affordability:
Tip
This widget also includes a section to include plans you want to appear in the affordability analysis provided by the widget. Note that this is unrelated to the Plan Inventory tab under the Setup menu described above. The Plan Inventory is where you select which plans to use for reporting on the 1095-C; the plan selections on the widget are only for its analysis reports and does not impact the 1095-C.
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Processing & Publishing
Accessing the Setup Forms
Once all of that prerequisite setup is in place, it’s time to view, audit, and publish the forms for your employees. Under
the ACA menu in Settings, the admin will see a link labeled Process & Publish:
After selecting that link, you will see these tabs:
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Setup Validation Tab
This tab provides a helpful dashboard to confirm your setup so far and any outstanding gaps:
If you review this information and you think there may be gaps in your setup, go back and complete that before
proceeding to the next processing tab.
Tip
This tab currently includes sections for each of the four tabs under the Setup menu. It does not currently indicate if you remembered to define safe harbors in the ACA Affordability widget. Don’t forget that!
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Offer and Coverage Tab
As we’ve said before, Part II (Lines 14 – 16) is really the heart of the form and of particular interest to the IRS. This tab
allows you to preview that data for employees and then override any values as you see fit.
Efficient Mass Audit
First, use the Export to Excel link to generate an Excel file for all of the employees.
This spreadsheet includes the following columns for each employee:
EIN (an employee with multiple EINs during 2015 will have a row for each in the file)
Employee Name and ID
Hire Date and Termination Date
Is the employee receiving a 1095-C? (Yes or No)
If No, then why not?
Monthly values for Line 14, Line 15, and Line 16
The purpose and benefit of providing this information in Excel is that you can use that tool’s powerful filtering and
sorting features to isolate exactly what you want to audit. For example, you may want to find all employees not getting a
1A in Line 14 and analyze why to validate.
What if I have Data to Correct?
If you identify specific employees where inaccurate employee or benefits data is leading to the wrong code, you can
update that source data in HR and then click the Recalculate button on the tab. All employee codes will be recalculated
and you can export to Excel again if desired to continue auditing.
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What if I Disagree with a Code Determined by Ascentis?
We understand that in some cases grey IRS language may lead to different interpretations of which code should apply
for an employee in a month. Alternatively, your professional advisor may advise you to use a different code. Therefore
you also have the flexibility on this tab to override the codes determined by Ascentis for Lines 14 – 16 with your
preferred codes.
If you use the Excel file and identify and employee for whom you want to override a code, you can use the Find button
on the tab to open the employee’s record. You will see the same codes from Excel in the System Logic row of values, and
then a Your Override row where you can select a new value.
If you save an override, when you publish the actual 1095-C PDF form, it will reflect the override rather than the original
system-determined code.
Covered Individuals Tab
This tab lets you export Part III data to Excel to preview. As a reminder, Part III displays all covered individuals (employee
plus spouse and/or children) who were enrolled during 2015 in a self-funded plan which is not multi-employer.
The file’s columns match those in Part III of the 1095-C so you can audit what will be printed on the forms. Unlike the
previous tab, this one does not enable you to override any values. If there is an issue with who is or isn’t listed as a
covered individual, correct the benefits enrollment records which provide this data.
Tip
If your plan is fully-insured, this section will be blank per the IRS Regulations.
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Review & Publish Tab
This is the last step in the process. You’ve audited and corrected information as needed, and now you’re ready to
generate and distribute the forms.
First, click the Produce button to create the forms for the employees. You will see status information below the button.
Next, find any individual employee to view the PDF form as it will be published.
To complete the process, check the box to sign off on the terms and conditions and to enable the Publish button. Finally,
click the Publish button to generate the forms and initiate distributing them to employees.
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Distribution to Employees
Employee Access You’ve created the forms…how do they get into your employees’ hands? They will be published in ESS under My
Benefits → 1095-C for My Taxes.
Your employees also have a paperless option. When they log in to ESS (as soon as you are on release 9.6), a pop-up will
appear, and will continue to appear until selected:
The Set Your ACA 1095-C Preference link directs to this page, where the employee can select Yes or No. The employee
will get the form in ESS either way; this is determining if the employee will also get a paper copy mailed.
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Administrator View Common question: I’m an admin; can I just define a default paperless setting for employees? No, the IRS requires that
the paperless opt-in is done by the employee. But you do have the option to monitor selections so you can follow up
with employees as needed.
Go to the Welcome & Status page under the ACA menu:
You will see a couple links to view status reports:
Ascentis ACA Client Portal http://www.ascentis.com/ACA/Ascentis-ACA-Welcome.asp (password is AscentisACA)
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