ACA Reporting—to IRS and Employees APPLIES TO: --All self-funded health plans—any size --All fully-insured employers with 50 or more full-time equivalent employees WHAT IT IS: Required reporting by employers and insurers to enable the IRS to determine compliance with the Individual Mandate, Employer Mandate and individual eligibility for premium tax credits under ACA. Reports are required to be provided to the IRS and to individuals. There are two types of reporting. Employers with fully-insured plans will have only one type of reporting (insurance carriers will provide the other reporting); self-funded employers with 50 or more full-time employees will report on both types, but will have a combined reporting process; smaller self-funded employers will have only one type of reporting. --The first reporting must be made in early 2016, for the 2015 calendar year. --Even employers who qualify for the 50-99 employees Transition Relief for 2015 will need to file their reports in early 2016. --Non-calendar-year plans will need to report information for coverage provided during the 2015 calendar year. NOTE: While the final rules for reporting were issued on March 5, 2014, the forms to be used were not released at that time. 1. Section 6055 of the Internal Revenue Code, also referred to as “Minimum Essential Coverage Reporting”. Minimum Essential Coverage (MEC) here refers to any health plan—other than an excepted plan. This includes major medical and other plans, not just those called MEC plans. --Health insurers and employers who offer self-funded plans (even self-funded employers with fewer than 50 employees) will be required to file an annual statement to the IRS and to covered individuals. --Required: Information about the entity providing coverage; information on individuals enrolled in coverage, with identifying data and the months for which they were covered (including full-time, part-time and temporary employees; covered spouses and dependents; retirees & COBRA). 2. Section 6056 of the Internal Revenue Code, also referred to as “Employer Mandate Reporting”. --Applicable Large Employers (ALEs)—employers with 50 or more full-time equivalent employees (whether fully-insured or self-funded) will be required to submit information to the IRS and to each of the employer’s full-time employees. --Required: Information about the employer offering coverage including the number of full-time employees; information on each full-time employee, including information on any coverage offered to the employee.
ACA Reporting—to IRS and Employees (cont’d) WHAT EMPLOYER MUST DO: * Fully-insured --6055-Minimum Essential Coverage Reporting: The employer’s health insurance company will be required to make this filing to the IRS and to covered individuals. --6056-Employer Mandate Reporting: * ALEs subject to the Employer Mandate for the 2015 plan year will be required to submit reporting. ALE status is based on the number of full-time equivalent (FTE) employees during the previous calendar year. For 2015 reporting due in early 2016, ALE status is based on the 2014 calendar year employment. * A third party administrator may assist the employer with the reporting, but the employer has ultimate responsibility for the reporting. * Reporting must include each full-time employee who is offered at least minimum essential coverage. * 50-99 employers who qualify for the Transition Relief for 2015 Plan Year will be required to file their reporting, including their attestation of their eligibility for the Transition Relief. *NOTE: This reporting must be made to the IRS and to each full-time employee. * Self-funded --6055-Minimum Essential Coverage Reporting: * Self-funded plans of employers with fewer than 50 full-time employees will only have to submit this part of the reporting—to the IRS and to employees who are provided at least minimum essential coverage. * Self-funded employers with 50 or more full-time employees will submit a combined report for 6055 and 6056 requirements. --6056-Employer Mandate Reporting: * Self-funded employers with 50 or more full-time employees will use a combined report for 6055 and 6056 requirements, and the employer will file this report to the IRS and provide to each employee named in the report. WHAT INFORMATION MUST BE REPORTED:
Self-funded 6055 data: o For each individual enrolled, including dependents: name, address, Social Security Number (SSN), months during which individual was covered for at least one day. Last 4 digits of SSN may be used. If SSN is not available after reasonable effort to obtain, the individual’s date of birth can be used. o For plan sponsor: name, address, FEIN, contact information and policy number.
ACA Reporting—to IRS and Employees (cont’d)
Standard 6056 data for ALEs (if employer does not qualify to use a simplified reporting method— SEE BELOW): o Employer name, address, and Tax ID; o Name and phone number of employer’s contact person; o Calendar year for which the information is reported; o Whether the employer provided minimum essential coverage (MEC) to full-time employees and their dependents; o Months minimum essential coverage was available; o Each full-time employee’s monthly cost for employee-only coverage under the employer’s minimum value plan; o Number of full-time employees for each month; o Name, address, and tax ID of each full-time employee during the year and the months the employee was covered; and o Any other information specified in forms, instructions, or published guidance.
NOTE: Several simplified methods and transitional reporting methods are available:
“Qualifying Offers” o For each full-time employee who is made a "qualifying offer", the employer only has to report names, addresses and SSNs, identifying that the offer was for all 12 months, OR using a code for each month, if offer was for fewer than 12 months. o A "qualifying offer" is minimum value (MV) coverage offered to employee, spouse and children that costs for employee-only coverage no more than 9.5% of Federal Poverty Level (currently about $1,100). NOTE: 1) the term "highly affordable" can be used for this offer, since it is different from the "affordable" definition for the Employer Mandate; 2) to be a “qualifying offer”, the coverage must be offered to spouse (in addition to children— natural and adopted), which is also different from the requirements for the Employer Mandate. o Employers who use this method also can provide EEs a simplified report/standard statement. o AND for 2015 ONLY: Employers that make a "qualifying offer" to at least 95% of their fulltime employees, their spouses and children will be able to use the simplified reporting for all their employees, including any employees who do not receive a qualifying offer for the full year. Employers will provide employees with standard statement relating to their possible eligibility for premium tax credits. NOTE: Don't confuse this 95% with the offer of coverage to at least 70% of full-time employees to avoid the $2000 penalty for employers subject to the Employer Mandate for 2015. This "qualifying offer" to at least 95% relates only to the reporting requirements.
ACA Reporting—to IRS and Employees (cont’d)
Option to Report without Separate Certification of Full-time Employees (also called the “98% Offer”) o If the employer offers affordable, MV coverage to at least 98% of its full-time employees, the employer can report without having to indicate who is full-time and who is part-time. "Affordable" for this option is the Employer Mandate affordable definition, with the W-2, etc. safe harbors, NOT the "highly affordable" definition for the “Qualifying Offer” Option. o This option is most valuable to employers who provide coverage to all employees. o EXAMPLE: Employer offers affordable, MV to all employees who work at least 20 hrs/week…can file certification of this offer. Even though some part-timers are on the list, employer doesn't have to indicate who is full-time and who is part-time.
WHEN:
IRS filing deadlines (both 6055 and 6056 reporting) are: o February 28 annually for paper filing [March 1, 2016, will be the first actual deadline, since Feb. 28 falls on a Sunday in 2016.] Only small employers with fewer than 250 individual reports are allowed to file on paper. o March 31 annually for electronic filing o Extensions of up to 60 days may be available. Deadline to provide individual statements (both 6055 and 6056): o January 31 annually, same as W-2 o Electronic delivery is only allowed if employee provides affirmative consent (Employer must ask employee and receive positive response in writing that employee agrees to receive statement electronically. The electronic statement and consent must satisfy strict requirements, and employees must be permitted to withdraw consent). CAUTION: If deliver electronically instead of via mail, the employer needs to be able to confirm receipt. If the employer is mailing the statement, it can be sent with the W-2 form. If mailed to last known address, there is no requirement to re-send or follow-up if returned undelivered.
WHAT FORMS ARE USED: Like W-2/W-3 forms, there are separate forms for each employee and one transmittal form for each type of filing. 1094-C: Transmittal to IRS 1095-C: Employee statement
Self-insured employer: Both sections of form Fully insured employer: Top half of form only
1095-B: Insurance companies, self-insured multiemployer plans, government-sponsored plans
ACA Reporting—to IRS and Employees (cont’d) ADDITIONAL NOTES: Controlled groups that total 50 or more FTEs (and thus are subject to Employer Mandate): each company/entity in the group needs to do separate reporting filing. EXAMPLE: 1 parent company + 10 wholly owned subsidiaries that = more than 50 total FTEs. Each of these 11 entities must file separately. PENALTIES: Failure to comply with reporting: $100 per return, up to a maximum of $1.5 million per calendar year. This penalty is applied separately for 6055 and 6056. Penalty could be waived if due to reasonable cause. Penalty can be reduced by correcting quickly. There is also limited relief for the first year for incorrect or incomplete information.
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