Mandatory reporting of employee health coverage information ranks as one of the most important compliance requirements the Affordable Care Act imposes on employers. Acknowledging this, the Internal Revenue Service on August 29 released draft instructions and helpful questions and answers.

IRS clearly understands that to comply with new ACA reporting requirements employers will need time not only to learn the intricacies but to put in place HCM systems that can correctly identify, collect and organize the information that must be filed with IRS and furnished to employees.

Code section 6055 reporting relates to the individual mandate to have health insurance; Code section 6056 applies to the employer mandate to offer coverage to full-time employees.  

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IRS News: Employer ACA Reporting

Fri Sep 5, 2014
Mandatory reporting of employee health coverage information ranks as one of the most important compliance requirements the Affordable Care Act imposes on employers. Acknowledging this, the Internal Revenue Service on August 29 released draft instructions and helpful questions and answers.

IRS clearly understands that to comply with new ACA reporting requirements employers will need time not only to learn the intricacies but to put in place HCM systems that can correctly identify, collect and organize the information that must be filed with IRS and furnished to employees.

Code section 6055 reporting relates to the individual mandate to have health insurance; Code section 6056 applies to the employer mandate to offer coverage to full-time employees.

Part 1 of this two-part blog focuses on IRS questions and answers relating to Code section 6055 reporting and Forms 1094-B and 1095-B that health insurance issuers, including sponsors of self-insured health plans, must use to report minimum essential coverage.

Part 2 will address Code section 6056 reporting for all employers subject to the employer shared responsibility provisions of ACA.

Highlights from the latest IRS Q&A on Code section 6055 reporting:

  • What are the requirements? According to IRS,every provider of minimum essential health coverage, including plan sponsors of self-insured group health plans, must annually report coverage information by filing an information return with IRS and furnishing a statement to individuals.
  • Why reporting? IRS needs this information to enforce ACA’s individual mandate to have health insurance. In other words, the government depends on employer reporting for enforcement of the individual mandate.
  • When to comply? The reporting mandate is effective for coverage in 2015, i.e., providers will file the first returns with IRS in 2016, specifically on or before February 28.
  • What information must be reported to IRS? Sponsors of self-insured plans and other coverage providers must report information such as the name and TIN (or DOB) of each individual covered under the policy and the months for which the individual was enrolled, as well as the name, address and EIN of the provider.
  • How to report to IRS? The information return that health coverage providers must file with the IRS is Form 1095-B, which is the employee statement, as well as transmittal Form 1094-B.
  • To Whom Must Providers Furnish a Statement? Providers, including sponsors of self-insured health plans, must furnish a statement to “a responsible individual,” assumed to be the person who enrolls one or more individuals in minimum essential coverage.  Statements must be furnished no later than January 31 of the year following the year in which coverage is provided.
  • What About Penalty Relief? IRS states it will not impose penalties for 2015 returns and statements filed and furnished in 2016 for incorrect or incomplete information reported. Reporting entities must show a good faith effort to comply with reporting requirements, including timely filing information returns and furnishing statements.

Part 2 of this blog will outline Code section 6056 requirements to report information about health insurance coverage offered or not offered to full-time employees under employer-sponsored health plans.