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As an employer, do you offer an Individual Coverage HRA? If so, this will impact the information required on the IRS on Form 1095-C.

The Individual Coverage Health Reimbursement Arrangement (HRA) was introduced in 2020 and is an alternative to a traditional group health plan. The HRA’s primary goals are to allow employers to control costs and provide greater flexibility than a conventional plan. The employer contributes money to the HRA, and employees can use the money to pay for qualifying medical expenses, while employers can define what qualifies as a medical expense.

Commonly covered expenses often include:

  • Insurance premiums for a health plan purchased through the Marketplace
  • Premiums for dental and vision insurance
  • Out-of-pocket costs for doctor visits and treatments

How does this impact your Affordable Care Act reporting?

Line 14 of the 1095-C now has codes related to the Individual Coverage HRA. Codes 1L through 1S indicate different scenarios and offers of coverage about the ICHRA. Listing the incorrect code on a 1095-C Form puts you at risk of receiving penalty assessments from the IRS.

If you need assistance with ACA tracking and reporting, please contact us or request a demo.

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