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ACA Reporting: Are You Ready?

Sign that says Affordable Care Act with an arrow pointing right. ACA Reporting.

11/16/2015

IRS Reporting Requirements Apply to For-Profit and Not-for-Profit Organizations Beginning January 1, 2015, with the First Reports Due in Early 2016

Beginning in 2016, employers that sponsor Fully-Insured or Self-Insured group health plans are required to report information to the IRS about the health coverage provided during the prior calendar year (2015). The reporting is meant to assist the federal government in enforcing compliance with both the employer and individual mandates, and, in turn, in administering the premium tax credit and cost-sharing subsidy eligibility and payments through both the federally facilitated and state-run health insurance exchanges. In addition, employers are required to provide employees with individual statements that summarize the IRS report, which is meant to assist individuals in complying with the individual mandate.

For employers, there are two separate reporting requirements: Internal Revenue Code (IRC) Sections 6055 (all employers that sponsor Self-Insured plans) and 6056 (all employers that are subject to the employer mandate). Employers subject to both 6055 and 6056 (i.e., those with 50 or more full-time employees [FTEs], including equivalents, that sponsor Self-Insured plans) may combine their reporting, as described below. 

Due Dates 

Generally, the 6055 and 6056 reporting due dates mirror the Form W-2 due dates. Specifically, employers must file their reports on or before Feb. 28 (March 31, if filing electronically) of the year following the calendar year to which the reporting relates. These dates apply regardless of the plan year of the employer-sponsored coverage (e.g., reporting is due on those dates for 2015 compliance, even if the plan year runs from May 1 through April 30). In addition, employers must distribute employee statements by January 31 of the following year for 2015 compliance.

Forms for Reporting 

Generally, there are transmittal forms (IRS Forms 1094-B and 1094-C) that will accompany the actual information reports, (IRS Forms 1095-B and 1095-C).  Please see the chart below for a summary of the forms requirement by employer size and plan type:

Employee Type60556056IRS ReportDue DateEmployee StatementDue Date
Small Fully-InsuredNoNoN/AN/AN/AN/A
Small Self-InsuredYesNo

Form 1094-B

Form 1095-B

2/28 - Paper*

3/31 - Electronic

Copy of Form 1095-B

or Substitute***

1/31**

Large Fully-InsuredNoYes

Form 1094-C

Form 1095-C

Sections I and II Only

2/28 - Paper*

3/31 - Electronic

Copy of Form 1095-C

or Substitute***

1/31**

Large Self-InsuredYesYes

Form 1094-C

Form 1095-C

Sections I, II and III

2/28 - Paper*

3/31 - Electronic

Copy of Form 1095-C

or Substitute***

1/31**

Reporting Methods 

When filing with the IRS, employers may file by paper or electronically, although employers filing at least 250 Forms 1095-C must file electronically. Employers may also use third parties (such as a third-party administrator, etc.) to file on their behalf, although the employer remains liable for any reporting failures.

When distributing employee statements, employers may send statements via first-class mail to the recipient’s last known address. As always, employers must keep accurate records evidencing the procedures used in case evidence is requested, such as in the event of an IRS audit. Importantly, employee statements may be included in the same mailing with Form W-2. Employers may also provide statements electronically, so long as the employee consents to electronic delivery.

6055 Reporting: Employers of Any Size with Self-Insured Group Health Plans

Section 6055 reporting applies to employers of any size that sponsor a Self-Insured group health plan or any other entity that provides minimum essential coverage (MEC) to individuals. MEC includes any major employer-sponsored medical plan, including retiree-only coverage, such as a retiree-only HRA, but does not include excepted benefits (e.g., health FSAs, stand-alone dental and vision plans, supplemental coverage), HRAs for active employees, Medicare Part B, on-site medical clinics or wellness programs.

6055 requires employers to provide specific information in their reports, including:  

  1. Employer’s name, address and employer identification number (EIN)
  2. Each covered individual’s name, address and taxpayer identification number (TIN) (If the employer, after reasonable efforts, is unsuccessful in obtaining an individual’s TIN, it may instead report the individual’s date of birth [DOB].)
  3. For each covered individual, the months for which the individual was enrolled (for at least one day) in coverage and entitled to receive benefits
  4. Whether coverage is Small Business Health Options Program (SHOP) coverage (and, if so, the SHOP identifier)

It is important to note that covered individuals include spouses, dependents and former employees. 

6056 Reporting: Employers with at Least 50 FTEs Sponsoring Fully or Self-Insured Group Health Plans

Section 6056 reporting applies to all employers subject to the employer mandate (generally, those with 50 or more FTEs and full-time equivalents). 6056 requires employers to provide specific information in their reports, including:  

  1. Employer’s name, address and EIN
  2. The calendar year for which the information is reported
  3. Number of FTEs for each month during the calendar year
  4. Months during the calendar year that MEC was available
  5. Certification as to whether the employer offered its FTEs and their dependents the opportunity to enroll in MEC, by calendar month
  6. Each FTE’s share of the MEC’s self-only premium, by calendar month
  7. Name, address and TIN (or DOB) of each FTE employed during the calendar year
  8. Months, if any, during which each FTE was covered under the plan

Penalties

IRC Sections 6721 and 6722 contain penalties for employers that fail to execute their 6055 and 6056 reporting. The penalty is generally $250 per failure per year, with a maximum penalty of $3 million. For 2015 reporting only (due in early 2016), no reporting penalties will apply where the employer is using good faith efforts to comply. In other words, the employer can escape penalties for incorrect or incomplete reports (e.g., those filings with missing TIN or DOBs), but not for a total failure to file.

If you have questions regarding your ACA reporting, please call your RINA representative.


*Because 2016 is a leap year, paper reports for 2015 are due 

February 29, 2016.

**Because January 31, 2016 falls on a Sunday, employee statements for 2015 must be distributed by February 1, 2016.  

***Substitute must include same information as actual form.  

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