ACA reporting requirements
January 15, 2015
On March 5, 2014 the Internal Revenue Service issued final regulations on employer reporting requirements under the Affordable Care Act that will take effect in 2015. Employers with fewer than 50 full-time employees and full-time equivalents are exempt from the ACA employer shared responsibility rules and the related employer reporting requirements.
Background – The ACA added Sections 6055 and 6056 to the Internal Revenue Code. Code Section 6055 generally requires health insurers and self-insured employers that provide minimum essential coverage to report to the IRS information about the type and period of health coverage they provide to covered individuals. Code Section 6056 requires applicable large employers (generally those with 50 or more full-time employees and full-time equivalents) to report to the IRS details about the health coverage (if any) they offered to full-time employees.
The ACA employer reporting rules were originally intended to go into effect beginning in 2015 for coverage provided during calendar year 2014. However, the IRS delayed the enforcement of the employer shared responsibility rules and the related reporting requirements. As a result of the enforcement delay, employers are not required to comply with these reporting requirements until early 2016. The first reporting will include information related to employer health coverage provided during 2015.
Employer reporting requirements – An employer with a self-insured plan can report using a single, consolidated form that includes information required under both Code Sections 6055 and 6056. The combined form has two sections: the top half includes the information necessary for Code Section 6056 reporting and the bottom half includes information necessary to satisfy Code Section 6055. An employer with a fully insured health plan is required to complete only the top section of the combined form (reporting for Code Section 6056). Insurers and other providers of health coverage will report only under Code Section 6055, using a separate form.
The following information must be included for Code Section 6055 reporting purposes:
- Name, address, and taxpayer identification number of of the reporting entity required to file the return;
- Name, address, and TIN of each individual (including spouses and dependents) covered under the plan; and
- For each covered individual, the months in which (for at least one day) the individual was enrolled in coverage.
The following information must be included for Code Section 6056 reporting purposes:
- Employer name, address, and TIN;
- Name and phone number of employer’s contact person;
- Calendar year for which the information is reported;
- Whether the applicable large employer provided minimum essential coverage to full-time employees and their dependents;
- Months minimum essential coverage was available;
- Each full-time employee’s monthly cost for employee-only coverage under the employer’s minimum value plan;
- Number of full-time employees for each month;
- Name, address, and TIN of each full-time employee during the year and the months the employee was covered.
Simplified employer reporting option – For employers that provide a “qualifying offer” to any of their full-time employees, the final regulations provide a streamlined alternative to reporting monthly, employee-specific information on those employees. A qualifying offer is an offer of minimum value coverage that provides employee-only coverage at a cost to the employee of no more than $1,100 in 2015 (9.5% of the federal poverty level), combined with an offer of coverage for the employee’s family.
For employees who receive qualifying offers for all 12 months of the year, employers are required to report only the names, addresses, and TINs of those employees and the fact that they received a full-year qualifying offer. Employers must also provide employees a copy of the simplified report indicating that the employee received a full-year qualifying offer. Employers are permitted to use a code for each month a qualifying offer is made for any employee who received a qualifying offer for fewer than 12 months of the year.
For 2015 only, employers certifying that they have made a qualifying offer to at least 95% of their full-time employees (including an offer to their spouses and dependents) are allowed to use the simplified reporting method for their entire workforce, including those employees who do not receive a qualifying offer for the full year. Such employers must also provide employees with statements relating to their possible eligibility for premium tax credits.
The final regulations also allow employers who provide qualifying offers to at least 98% of their employees named in the simplified report to certify the offering without requiring them to identify which of its employees are full-time.
Timing of filing – Annual employer returns must be filed with the IRS by Feb. 28 (March 31, if filed electronically). The report will include plan and employee information for the prior calendar year regardless of the employer’s plan year. Corresponding employee statements must be provided annually to full-time employees by Jan. 31.