Employers who offer self-insured (sometimes called self-funded) health plans have the added ACA obligation of reporting as if they were the insurance carrier.
- For self-insured employers large enough to be subject to the ACA coverage mandate, this reporting is done on Part III of Form 1095-C.
- For self-insured employers not large enough to be subject to the ACA coverage mandate, this reporting is done on Form 1095-B.
Reporting on these forms is what the IRS will use to validate compliance with the ACA individual mandate.
But it’s not just 1095 reporting that employers offering self-funded plans need to worry about.
- In their second quarter Form 720 submission, they will have to pay a fee for lives covered during the plan year.
- They may also have to submit IRS Form 5500 annually, to describe the type of benefit being offered.