KB13-046

The code “2D” is the IRS ACA 1095-C Line 16 code for “Employee in a section 4980H(b) Limited Non-Assessment Period for the month.” This means that the employee was either in their waiting period (new full-time employee) or initial measurement period (new variable hour employee).

The Non-Assessment Period maximum allowed by the IRS is up to 3 full months after the hire month for a new full-time employee. If this is selected, then the 1095-C would show 4 months with a 2D on line 16. For example, if a full-time employee was hired on 7/2/2018 the employee would be in their Non-Assessment Period from July through October. To correlate with this time period, a 2D will appear in the months of July through October on Line 16 of the 1095-C form and a corresponding “1H” will appear in Line 14.


 
However, the ACA Cloud solution allows you to configure your specific full-time waiting period in the Company setup or the ACA Plan setup. The ACA Plan setup is shown below.
 

Whether you configure your company’s full-time waiting period in the company or ACA plan setup; if your company offers insurance immediately on hire, you would uncheck Start of Month and “0” should selected for the months/days. If your company offers insurance at the start of the next month after hire, you would only check Start of Month and “0” should be selected in Number of Months and Waiting Period Days. If you have a set days of waiting you would uncheck the Start of Month and then enter your Waiting Period Days up to a maximum of 90.

 
The system will properly complete the 1095-C form based on how you configured your company’s full-time waiting period. For example, if an employee was hired on July 2nd and your company offers insurance first of the month following 30 days. So when configuring the system you checked Start of Month and then select 1 month in the dropdown. The 1095-C form for this employee would show a code 1H on line 14 and code 2D on line 16 for July and August.


 
If your medical plan are Self-Insured, Part III is determined by the months that you upload with a Deduction (2) and/or Benefit (3) for Health Insurance in the transactions. If you do not have a transaction showing a month when they are covered, then the box for that month in Part III will not be checked. Please see example below. For more information click here.

 

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Last Review: 5/17/2017 – Revision: 2.0

Applies To: ACA Reporting Requirements, ACA Compliance solution

Categories:  Year End – 1095 & Filing

Keywords:  2D, Non-Assessment