Fewer full-time employees may elect COBRA coverage these days, because they can qualify for a premium tax credit and get a better deal on health insurance through the individual health exchange. But high earners, who make too much to qualify for a tax credit, may still elect COBRA. How you report COBRA on Form 1095-C depends on the reason COBRA was offered. FAQs from the IRS detail these reporting requirements.
of employment. You must report offers of COBRA coverage made to full-time employees who terminated only if they pick up the coverage.
Example: Harry, an employee of Mega, elects self-only coverage. He terminated on June 15 and didn’t elect COBRA. On his Form 1095-C: For January–May, Mega enters Code 1E on Line 14, the amount of the lowest cost coverage for self-only coverage on Line 15 and Code 2C on Line 16. For June, it enters Code 1H on Line 14 and Code 2B on Line 16. For July–December, it enters Code 1H on Line 14 and Code 2A on Line 16.
Example: If Harry took up COBRA, Mega reports as follows: For January–December, it enters Code 1E on Line 14 and Code 2C on Line 16. For January–May, it enters the amount of the lowest cost coverage for self-only coverage on Line 15. For June–December, it enters the COBRA premium for the lowest-cost self-only coverage on Line 15.
Reduction in hours. You must report all offers of COBRA coverage made to employees whose hours are reduced.
Example: James, another employee of Mega, is enrolled in self-only coverage costing $150 a month. In November, his hours are reduced so he’s no longer eligible for coverage. He elects COBRA for November and December, and he pays a monthly premium of $250. On Form 1095-C: For January–October, Mega enters Code 1E on Line 14, $150 on Line 15 and Code 2C on Line 16. For November and December, it enters Code 1E on Line 14, $250 on Line 15 and Code 2C on Line 16.
Example: James doesn’t take up the COBRA coverage. On Form 1095-C: For January–October, Mega enters Code 1E on Line 14 and $150 on Line 15; for November and December, it enters Code 1E on Line 14 and $250 on Line 15.
Key difference: Coding for Line 16 is determined as it would be for any other active full-time employee.
Result: Coding will depend on whether James is treated as a full-time employee, and if, so, whether James’ offer of COBRA satisfies an affordability safe harbor.
Reporting COBRA for spouses and dependents (self-insured employer). Report COBRA for each spouse and dependent who separately elects COBRA on a separate Form 1095-C, if you have their Social Security Numbers (SSNs). If you don’t have their SSNs, report on Form 1095-B. Spouses or dependents who receive COBRA because an employee is receiving COBRA are reported together on the same Form 1095-C or 1095-B that you provide the employee.