Health Policy Brief: IRS Simplifies Employer Reporting Requirements in Final Rules
The IRS has issued final regulations to implement Sections 6056 and 6055 of the Affordable Care Act (ACA) that require employers to report information to the IRS about whether they provide coverage to employees and to whom they offer minimum essential coverage. These reporting requirements that were scheduled to take effect in 2014 have been delayed until 2015 under IRS Notice 2013-45.
Self-funded employers with more than 50 employees must begin reporting under both sections in 2015, although the IRS will now provide a single, consolidated form that employers can use to report both to the IRS and to employees regarding the coverage that is available. The top half of the new form will satisfy Section 6056 reporting, which includes information required to be given to the IRS and to employees about the health care coverage employers have or have not offered to workers. The data elements requested are intended to help the IRS enforce employer "pay or play" penalties and help the IRS verify information provided by consumers as to whether they are eligible for premium tax credits under the ACA.
The bottom half of the form would satisfy 6055 reporting that requires certain information on individuals that are provided minimum essential coverage in order to help the IRS enforce individual mandate penalties and determine an individual's eligibility for premium tax credits. Data elements employers will be required to report include:
- Name, address and TIN of the employer
- The name and telephone number of a contact person at the company
- Certification as to whether the employer offered a group health plan to employees and dependents, by calendar month
- The number of full-time employees, by month
- For each full-time employee, the months that the employee was offered coverage
- For each full-time employee, the employee's share of the lowest cost monthly premium for self-only coverage providing minimum value, by month
- For each full-time employee, the name, address and TIN of each full-time employee during the calendar year, and the months in which each employee was covered under an employer sponsored plan.
Related statements to employees must be provided to workers on or before Jan. 31 of each year (although the first required statement in 2016 will be due Feb. 1 due to Jan. 31 falling on a Sunday). These statements are intended to help employees determine for which months during the preceding year, if any, they can claim a premium tax credit on their tax returns for coverage purchased through the exchange.
In the final rule, the IRS outlines some simplified alternatives for reporting data in certain circumstances, as follows
- Employers can file a shorter form in relation to employees that are offered coverage that meets the 60 percent "minimum value" test where the employee contribution for self-only coverage does not exceed 9.5 percent of the federal poverty line (about $1,100 per year in 2015). The form would require the names, addresses and TINs for employees who receive qualifying offers for all 12 months of the year. For employees that receive a qualifying offer of fewer than all 12 months of the year, employers will be able to enter a code indicating months that the qualifying offer was made.
- In 2015 only, an employer that can certify that it has made a qualifying offer to at least 95 percent of its full-time employees and their spouses and dependents can provide a simplified notice to employees describing the coverage provided;
- An employer that can certify that it has made an offer of minimum value and affordable coverage to at least 98 percent of its employees and dependents does not have to determine whether each employee is a full-time employee or report the number of full-time employees.
- Final Rules governing Section 6056 can be found here.
- Final rules governing Section 6055 can be found here.
The Alliance does not provide legal advice. If you have questions about your plan's compliance with these requirements or how to implement them, please contact your attorney.