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Selecting 1095-C Defaults Step 3

In Step 2 of the Forms Wizard, you defined the 1095-C Form information for employees who are newly hired, rehired, and variable hour. Use this step to define the healthcare affordability codes and coverage premiums for your employees.

Safe Harbor

When you select a safe harbor method here, My Workforce Analyzer assesses the affordability method with the other information you provide to determine the appropriate safe harbor code for Form 1095-C, Part II, line 16. Choose from one of these section 4980H affordability safe harbor tests:

  • Box 1 of Form W-2. This determines affordability based on whether an employee’s premium contribution for the lowest-cost, self-only coverage that provides minimum value exceeds 9.66% (in 2016) of the employee’s wages as reported on Form W-2 Box 1 for the calendar year.

  • Federal Poverty Level. This affordability safe harbor test is based on the Federal Poverty Line (FPL), the value for the contiguous United States and not on a state-by-state basis.

    For coverage to be affordable, the employee’s contribution for the lowest-cost, self-only minimum value coverage cannot exceed 9.66% (in 2016) of the FPL at the beginning of the plan year or up to six months before the beginning of the plan year. Individuals below the FPL generally qualify for Medicaid.

  • Rate of Pay. This method determines affordability based on whether an employee’s premium contribution for the lowest-cost, self-only coverage that provides minimum value exceeds 9.66% (in 2016) of the employee’s wages as determined by the employee's rate of pay. For rate of pay, My Workforce Analyzer uses the lowest rate of pay for any payroll period that has a payroll period end date within the calculated month.

Offer of Coverage code (Part II, Line 14)

This alphanumeric list is from the Form 1095-C. A list of Offer of Coverage codes is provided to you in the glossary, but because these codes are subject to change by the IRS, you must verify the codes on the IRS document, Instructions for Forms 1094-C and 1095-C.

When you select a code here, it is printed on each applicable employee's Form 1095-C in Part II, line 14.

Employee Share of the Lowest Cost Monthly Premium (Part II, Line 15)

When you select Offer of Coverage codes 1B, 1C, 1D, or 1E, you are required to enter the employee share for your lowest cost, employee-only, qualified healthcare plan. This is the employee-only healthcare premium amount per month, and it is most likely the lowest rate for the plan. This information is printed on each individual's 1095-C form.

If your healthcare plan rates changed during the calendar year for which you are generating the forms, specify which Month the change went into effect and the new healthcare premium amount for the employee-only coverage (Employee share).

Note: If your healthcare plan rates did not change, leave the Month field blank and the Employee share field at $0.00.

Plan Start Month

This selection is new and optional as of 2016. Select the two-digit number representing the month when your lowest cost employee-only healthcare plan starts. Note the following information from the 1095-C/1094-C IRS instructions:

  • Blank. Because the field is not required for 2016, you can leave it blank. In 2017, this field may be mandatory.
  • 00. Select this only if there is no healthcare plan under which coverage is offered to the employee.
  • 01-12. Represents the month (01 for January, 02 for February, 03 for March, and so on) when the healthcare plan starts during the calendar year of the form. If more than one plan year could apply (for instance, if the ALE Member changes the plan year during the year), enter the earliest applicable month.