Certifications of Eligibility offer employers the opportunity to indicate that they are eligible for up to three different kinds of relief. The Certifications of Eligibility are as follows:
Box A, Qualifying Offer Method: Check this box if code 1A was entered on line 14 for any of the employer’s 1095-C forms. Checking this box indicates that there was a Qualifying Offer (1A) made to at least one full-time employee.
Box C, Section 4980H Transition Relief: Check this box if the employer has a non-calendar year health plan, and the employer met one of the following conditions:
- The employer had 50-99 full-time equivalent employees in 2014, did not reduce the size of its workforce or overall hours of service of its employees, and did not eliminate or materially reduce health coverage in that year. Employers that meet these criteria will use Code A in the column title titled “Section 4980H Transition Relief Indicator” in Part III of the 1094-C form. This code will only be used for months in which the ALE was reporting 2016 tax year information during their 2015 health plan.
- The employer had 100 or more full-time equivalent employees in 2014. Employers that meet this criteria will use Code B in the column titled “Section 4980H Transition Relief Indicator” in Part III of the 1094-C form. This code will only be used for months in which the ALE was reporting 2016 tax year information during their 2015 health plan.
Example:
ABC Company has a non-calendar year health plan that renews each year on July 1st. In 2014, ABC Company had 150 employees. For the months in 2016 where ABC Company’s health plan was still considered 2015 (until July; January through June), code B could be used in the column titled “Section 4980H Transition Relief Indicator” in Part III of the 1094-C form. The months in which the company’s health plan matched the tax year (July through December) would be left blank.
Checking box C will reduce or eliminate any Section 4980H penalty.
Box D, 98% Offer Method: Check this box if the employer offered at least 98% of its full-time employees and their dependents coverage that provided minimum value and minimum essential coverage. If this box is checked, the “Full Time Employee Count for ALE Member” column in Part III of the 1094-C is not required.
If one or more Certification of Eligibility applies, check all that are applicable. If no Certification of Eligibility applies, leave line 22 of the 1094-C blank.