In our blog post from September 2, we noted there were remaining questions regarding the reporting requirement for full-time employees covered by collective bargaining agreements under the multiemployer interim guidance. In particular, the main questions were:
- Whether employers claiming the multiemployer relief still had to obtain insurance information from the multiemployer plans for those full-time employees that enrolled in the plan’s insurance coverage.
- Whether code 2C prevailed over code 2E on Form 1095-C.
The 2014 instructions could be construed to require participating employers to obtain information from the multiemployer plans concerning which employees were enrolled for the purposes of filing Form 1095-C. The 2015 draft instructions for Forms 1094-C and 1095-C allowed participating employers to use code 1H (“no offer of coverage”) on Form 1095-C, Line 14, for any month in which the employer contributed to the multiemployer plan.
Employers were also instructed to enter code 2E (“multiemployer interim rule relief”) on Form 1095-C, Line 16. However, this led to confusion for many employers, as the instructions indicated that code 2C (“employee enrolled in coverage”) would be used as the default when more than one code might apply. In this situation, where employees covered by a collective bargaining agreement enrolled in the plan’s insurance coverage, code 2C could be viewed as the applicable Line 16 entry.
Entertainment Partners reached out to the IRS to clarify.
The 2015 final instructions, dated September 16, 2015, clarified that 2E is the proper code, despite the employee having enrolled in the insurance coverage offered by the multiemployer plan. This simplifies the reporting requirement for employers who rely on multiemployer transition relief for 2015. Employers can enter code 2E for any month in which the multiemployer relief applies, irrespective of whether the employee actually enrolled in the insurance coverage.
For reporting in 2016 and future years, employers relying on multiemployer arrangement interim guidance may be required to report offers of coverage made through a multiemployer plan in a different manner.