The Affordable Care Act (ACA) created new reporting requirements
under Internal Revenue Code (Code) Sections 6055 and 6056. Under these new
reporting rules, certain employers must provide information to the IRS about
the health plan coverage they offer (or do not offer) to their employees.
On Aug. 28, 2014, the Internal Revenue Service (IRS) released draft instructions for the forms
that employers will use to report under Code Sections 6055 and 6056.
·
Instructions for Forms
1094-B and 1095-B: These forms will be used by entities reporting under
Section 6055 as health insurance issuers, sponsors of self-insured group health
plans that are not reporting as applicable large employers (ALEs), sponsors of
multiemployer plans and providers of government-sponsored coverage.
·
Instructions for Forms
1094-C and 1095-C: These forms will be used by ALEs that are reporting
under Section 6056, as well as for combined reporting by ALEs who report under
both Sections 6055 and 6056.
On Aug. 29, 2014, the IRS also released Q&As
on Section 6055 and Q&As
on Section 6056. In addition, draft versions of Forms 1094-B, 1095-B, 1094-C and 1095-C were released
in July 2014. Draft Forms 1095-B and 1095-C were also updated on Aug. 28, 2014,
to include instructions for the recipient of the form.
Both the forms and instructions will be
finalized later this year.
The Code Sections 6055 and 6056 reporting requirements are
intended to promote transparency with respect to health plan coverage and
costs. They will also provide the government with information to administer
other ACA mandates, such as the employer and individual mandates.
Code Section 6055
requires health insurance issuers, self-insured health plan sponsors,
government agencies that administer government-sponsored health insurance
programs and any other entity that provides minimum essential coverage (MEC) to
report information on that coverage to the IRS and covered individuals.
Code Section 6056 requires
ALEs subject to the employer shared responsibility rules to report information
on the health coverage offered to full-time employees to the IRS and covered
individuals.
Under both Sections 6055 and 6056, each reporting entity will be
required to file all of the following with the IRS:
·
A separate information
return for each individual who is provided MEC (for ALEs, this includes only
full-time employees); and
·
A single transmittal
form for all of the returns filed for a given calendar year.
Under both Sections 6055 and 6056, the return and transmittal
forms must be filed with the IRS on or before Feb. 28 (March 31, if
filed electronically) of the year following the calendar year of coverage.
However, if the regular due date falls on a Saturday, Sunday or legal holiday,
entities should file by the next business day. For calendar year 2015, these
forms must be filed by Feb. 29, 2016,
(or March 31, 2016, if filing electronically).
These forms are not required to be filed for 2014. However, in
preparation for the first required filing (in 2016 for 2015 coverage),
reporting entities may voluntarily file in 2015 for 2014 in accordance with the
draft forms and instructions. More information about voluntary filing is
available on the IRS website.
All entities reporting under Section 6055 or 6056 must furnish a
copy of Form 1094-C or 1095-C, as applicable, to the person identified as the
responsible individual named on the form. Statements must be furnished by mail,
unless the recipient affirmatively consents to receive the statement electronically.
The statement must be furnished on or before Jan. 31 of the year following the calendar year of coverage. The
first statements are due to individuals by Feb.
1, 2016.
Any reporting entity that is required to file at least 250 returns under Section 6055
or 6056 must file electronically. The
250-or-more requirement applies separately to each type of return and
separately to each type of corrected return.
Reporting entities that are filing on paper will send paper
returns to the address provided in the instructions, based on where their principal
business, office or agency (or legal residence, in the case of an individual)
is located.
Under Section 6055, every person that provides MEC to an
individual during a calendar year must file Forms 1094-B (a transmittal) and 1095-B
(an information return). This includes:
·
Health insurance issuers or carriers;
·
Self-insured health plan sponsors;
·
Government agencies that administer
government-sponsored health insurance programs; and
·
Any other entity that provides MEC.
However, ALEs subject to the employer shared responsibility rules
that sponsor self-insured group health plans will report information about the
coverage in Part III of Form 1095-C,
instead of on Form 1095-B. In general, an employer with 50 or more full-time
employees (including full-time equivalents) during the prior calendar year is
considered an ALE.
All ALEs must file Form
1094-C (a transmittal) and Form
1095-C (an information return) for each full-time employee for any month.
·
Form 1094-C is used to report summary
information for each employer to the IRS and to transmit Forms 1095-C to the
IRS.
·
Form 1095-C is used to report information about
each employee.
These forms help the IRS determine whether an ALE owes penalties
under the employer shared responsibility rules, as well as whether an employee
is eligible for premium tax credits.
ALEs that sponsor a self-insured health plan must also complete
Form 1095-C, Parts I and III, for any individual (including any full-time
employee, non-full-time employee, family members and others) who enrolled in
the self-insured health plan. If the employee is full-time for any month, the
ALE must also complete Part II. If the employee is not full-time for all 12
months of the calendar year, the ALE must complete only Part II, line 14, by
entering code 1G in the “All 12 Months” column.
For other types of coverage, the issuer or plan sponsor will
provide the information about their health coverage to any enrolled employees.
The employer should not complete Form 1095-C, Part III, for those employees.
An employer that sponsors self-insured health coverage but is not
subject to the employer shared responsibility rules is not required to file
Forms 1094-C and 1095-C. Instead, these employers report on Forms 1094-B and
1095-B for employees who enrolled in the employer-sponsored self-insured health
coverage.
A Form 1094-C must be attached to any Forms 1095-C filed by an
ALE. An ALE may submit multiple Forms 1094-C, each accompanied by Forms 1095-C,
for some of its employees, provided that Forms 1095-C are filed for each
employee for whom the ALE is required to file.
ALEs must file a single Form 1094-C reporting aggregate
employer-level data for all full-time employees, identifying the form, on line
19 of Part II, as the Authoritative
Transmittal. One Authoritative Transmittal must be filed for each ALE, even
if multiple Forms 1094-C are filed by and on behalf of the ALE. For example, if
an employer has prepared a separate Form 1094-C for each of its two divisions
to transmit Forms 1095-C for each division’s full-time employees, one of the
Forms 1094-C filed must be designated as the Authoritative Transmittal and
report aggregate employer-level data for all full-time employees (for both
divisions).
There must be only one Form 1095-C for each full-time employee of
an ALE. For example, if an ALE separately reports for the full-time employees
of its two divisions, the ALE must combine the information for any employee who
worked at both divisions during the year so that there is only a single Form
1095-C for that employee which reports information for all 12 months of the
calendar year.
In contrast, a full-time employee who works for more than one ALE
that is a member of the same aggregated ALE group (that is, works for two
separate ALE members) must receive a separate Form 1095-C from each ALE member.
Please contact Senn Dunn for more information on reporting under
Code Sections 6055 and 6056.
Find us on: