section 6056

Starting in 2015, the Affordable Care Act imposes burdensome new reporting requirements on employers and insurers that provide group health coverage.  We described the reporting requirements in earlier posts, here and here.

Employers and other reporting entities have anxiously awaited the IRS forms on which these reports will be made, so that they can program and test their computer systems, develop administrative procedures, coordinate reporting responsibility with their affiliates, and make arrangements with their business partners to collect and report the necessary information.  The IRS posted drafts of the reporting forms on its website yesterday.  Unfortunately, however, the instructions to the forms—which are expected to provide much of the detail programmers will need—will not be available until August.
Continue Reading IRS Releases ACA Reporting Forms

Many employers will face two significant new reporting requirements for employee health coverage starting next year:

  • Section 6055 Return:  Employers and insurers that provide minimum essential coverage must report information to the IRS about each covered individual for each month, and provide a copy of the report to covered employees and retirees.
  • Section 6056 Return:  Employers with at least 50 full-time employees must report additional information to the IRS (with a copy to the employee) to confirm that the employer offers health coverage that is affordable and provides minimum value to full-time employees and their dependents.

Final regulations (available here and here) adopt the reporting requirements proposed last fall, with only modest changes.  (We described the proposed requirements in our earlier post: Health Coverage Reporting Rules Create New Burdens for Employers.)  These are some of the challenges employers will confront as they prepare to comply with the new requirements:

No Further Extension of the Reporting Deadline

The IRS announced last year that it would waive the reporting penalties for coverage provided in 2014.  The final regulations do not provide any further extension of the reporting deadline.  Accordingly, the first reports will be due early in 2016 for health coverage provided in 2015.

Employers will have to develop administrative systems and procedures to collect the required information, and many employers will wish to engage outside vendors to help them comply with the new reporting requirements.  These arrangements generally must be in place by January 1, 2015, when the new requirements take effect.

No Electronic Statements Unless the Employee Consents 

An employer must provide individual statements to employees showing the health coverage information reported to the IRS for the employee and the employee’s family.  Although employers had requested rules that would allow them to furnish these statements electronically, the final regulations continue to provide that an employer may furnish an electronic statement only if the individual consents.  The consent rules will make electronic delivery impractical for many employers.

The employer’s request for consent must refer to the specific forms that the employer wishes to provide electronically.  Accordingly, even if an employer has previously received the employee’s consent to furnish other forms (such as Form W-2) electronically, or has received a general consent to furnish all forms electronically, these consents will not extend to the new health coverage statements.
Continue Reading Final Health Coverage Reporting Rules Offer Employers Little Relief

The IRS has released proposed regulations that implement two significant new reporting requirements for employer group health plans.  Employers and insurers that provide minimum essential health coverage must report information to the IRS about the coverage provided to each individual for each month, with a copy of the statement to the individual.  Employers with at least 50 full-time employees must report additional information to the IRS, with a copy to each full-time employee, to indicate whether the coverage they offer (if any) is affordable and provides minimum value.  Both reporting requirements will become effective in 2015.  Reporting entities must develop administrative systems and procedures before the effective date so that they will be able to begin collecting the required information in 2015.

Below is summary of the requirements for private employers sponsoring single-employer plans followed by a discussion of the reporting requirements.

Section 6055 Returns Section 6056 Returns
Who Must File Insurer, for insured plans. Employer, for self-insured plans Employers with 50 or more full-time employees (regardless of whether or how coverage is   provided)
Form 1095-B 1095-C
  • name, address, and EIN of employer
  • name, address, and TIN of insurer (for insured plans)
  • name, address, TIN of each employee or retiree and each covered spouse and/or dependent
  • for each covered individual, the months of the year for which coverage was provided
  • other information required by IRS in later guidance
  • name, address, and EIN of employer
  • name and phone number of employer’s contact person
  • whether the employer offered minimum essential coverage to its full-time employees each month of the year
  • the number of full-time employees each month, and the name, address, and TIN of each employee
  • for each full-time employee, the months when coverage was available and the months when coverage was provided
  • for each full-time employee, the employee’s share of the monthly premium for self-only coverage under the lowest-cost option (if any) that provides minimum value
  • other information required by IRS (see list below for information the IRS expects to require)
Additional   Content for Notice to Individual
  • contact phone number for entity required to file statement
  • policy number (for insured plans)
Due Date for Returns To the IRS: February 28 (or by March 31, if filing electronically).

To the individual: January 31

Continue Reading Health Coverage Reporting Rules Create New Burdens for Employers