For an applicable large employer (ALE) who sponsors a fully insured plan, does the ALE need to report their retirees and COBRA participants who are enrolled in its plan on Forms 1094 and 1095-C?

How about an ALE who sponsors a self-insured plan, does the ALE need to issue Forms 1095-C for those individuals?

ALEs are employers who employ on average at least 50 full-time employees (including equivalents) on a controlled group basis in the previous calendar year. ALEs are subject to the ACA employer mandate as well as annual ACA reporting via Forms 1094 and 1095-C. For the 2021 reporting, ALEs need to file Forms 1094 and 1095-C with the IRS by February 28, 2022, if filing by mail (available only for ALEs who file fewer than 250 forms) or March 31, 2022, if filing electronically. Additionally, by March 2, 2022, ALEs are required to furnish copies of Forms 1095-C to their full-time employees and other enrolled individuals (if they sponsor a self-insured plan).

An ALE who sponsors a fully insured plan does not need to report their retirees or COBRA participants if they were not active employees in any month in the reporting year (i.e., 2021 for this year’s reporting deadlines). If a retiree or COBRA participant was an active employee in any month before being terminated or retiring in mid-year, then the ALE needs to report them on Forms 1094 and 1095-C.

An ALE who sponsors a self-insured plan needs to report their retirees or COBRA participants if they were enrolled in the ALE’s plan during the reporting year, even if they were not an active employee in any months. This is because self-insured sponsors are also subject to another ACA reporting requirement under IRC Section 6055 to report whether a plan provided minimum essential coverage (MEC) to enrolled individuals during the year. Though the individual mandate provision’s penalty no longer applies, insurers and self-insured employers are required to satisfy the IRS Section 6055 MEC reporting continuously. For fully insured plans, their medical insurers have an obligation to satisfy the IRC Section 6055 reporting requirement rather than the employers. For non-full-time employees and non-employees who are enrolled in self-insured health coverage, the ALEs have an option to use Forms 1094 and1095-B rather than the -C forms. Additionally, they have an option to use the alternative manner of furnishing statements rather than furnishing the copies of Forms 1095-C. For more detailed information, the IRS’s 2021 Instructions for Forms 1094-C and 1095-C are helpful.

By contrast, a small employer that offers self-insured health coverage but is not an ALE member should not file Forms 1094-C and 1095-C but should instead file Forms 1094-B and 1095-B to report information for enrolled employees and non-employees, such as COBRA participants and retirees.

To summarize, ALEs sponsoring fully insured plans do not need to report on Forms 1094 and 1095 and issue Forms 1095 for non-full-time employees (e.g., COBRA qualifying beneficiaries and retirees) who were not active employees in any month in the reporting year. On the other hand, ALEs sponsoring self-insured plans need to report enrolled non-full-time employees and non-employees, including COBRA participants and retirees, on Forms 1094 and 1095.