How should an ALE member complete Part II of Form 1095-C for a full-time employee who terminates employment during a calendar year and receives an offer of COBRA continuation coverage? (2024.11)
We updated Government Reporting to support generating a 1095 Form for an employee who has been on COBRA for a full year.
Explanation:
An offer of COBRA continuation coverage that is made to a former employee due to termination of employment is not reported as an offer of coverage in Part II of Form 1095-C. If the ALE Member is otherwise required to complete a Form 1095-C for the former employee (because, for example, the individual was a full-time employee for one or more months of the year before terminating employment), the ALE Member should use code 1H, No offer of coverage, on line 14 for any month that the former employee was offered COBRA continuation coverage. For those same months, the ALE Member should use code 2A, Employee not employed during the month, on line 16 for each month in which the individual is not an employee (regardless of whether the former employee enrolled in the COBRA continuation coverage). Note, however, that an ALE Member that provides COBRA continuation coverage through a self-insured health plan generally must report that coverage for any former employee or family member who enrolls in that COBRA continuation coverage in Part III of the Form 1095-C. Also, the ALE Member may report the coverage on a Form 1095-B for any individual who was not an employee during the year and who separately elected the COBRA continuation coverage.
An offer of COBRA continuation coverage that is made to an active employee due to a reduction in hours is reported differently than an offer of COBRA continuation coverage to a former employee. See the next question for more details.
Source: Affordable Care Act website at irs.gov
What's new?
To allow employees to provide a 1095 Form to employees who have COBRA with the 1H offer of coverage and 2A safe harbor code for the months when the employee was not employed by the organization:
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In ACA Employees, we added the Elected Cobra checkbox and Eligible Until box to collect the employee's COBRA information and eligibility end date for the 1095 Form.
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