Additional Codes are Available for Reporting an Offer of an Individual Coverage Health Reimbursement Arrangement (HRA) (Feb. 3, 2021)
The IRS has announced a post-release addition to the codes for the 2020 Form 1095-C (see our Checkpoint article). According to an IRS website post, an applicable large employer that offers an individual coverage HRA (ICHRA) can use two previously reserved codes from Code Series 1 on Form 1095-C, line 14, for reporting offers of coverage for 2020. Code 1T indicates that an affordable ICHRA was offered to an employee and spouse (not dependents), and affordability was determined using the employee’s primary residence ZIP code. Code 1U indicates that an affordable ICHRA was offered to an employee and spouse (not dependents) and affordability was determined using the employee’s primary employment site ZIP code under an affordability safe harbor.
EBIA Comment: This change appears to correct an oversight in the 2020 Form 1095-C. For non-ICHRA coverage, line 14 Codes 1B through 1E address the four coverage possibilities for employer-sponsored minimum essential coverage that provides minimum value: employee only, employee plus spouse (no dependents), employee plus dependents (no spouse), and employee plus spouse and dependents. For affordable ICHRA coverage, the instructions provided codes for only three coverage possibilities—the possibility of an ICHRA offer to an employee plus spouse (no dependents) was not covered by the available codes. The addition of these two codes corrects that omission. For more information, see EBIA’s Form 1094/1095 Workbook at Section VIII (“Form 1095-C Report/Employee Statement: Employer-Provided Health Insurance Offer and Coverage”). See also EBIA’s Health Care Reform manual at Section XXXVI.D (“Information Reporting of Employer-Sponsored Coverage (Applicable Large Employers)”), and EBIA’s Consumer-Driven Health Care manual at Section XXVIII.B (“Individual Coverage HRAs (ICHRAs)”).
Contributing Editors: EBIA Staff.