The IRS has released draft versions of Forms that will be used by reporting entities for Code §§ 6055 and 6056 reporting requirements. As communicated in a previous HBI Expert Update, Forms 1094-B and
1095-B are to be used by entities subject to the 6055 reporting requirement and Forms 1094-C and 1095-C will report data for the section 6056 requirements. Employers should become familiar with their reporting obligations now so that they will be prepared to produce the required 2015 calendar year data for the 2016 due date. The IRS will be releasing additional information, including details on what substitute statements will be permissible under the section 6055 requirements.
Summary of 6055 & 6056 Reporting Obligations:
* All applicable large-employer members with self-insured group health plans will use a combined Form 1095-C along with 1094-C to satisfy Code §§ 6055 and 6056 reporting requirements. Applicable large employers that provide insured coverage will complete only a portion of Form 1095-C.
Disregard Certain Coverage from the Reporting Requirements:
As indicated in one of our previous updates, reporting is not required for a Health Reimbursement Arrangement (HRA), Health Savings Account and other arrangements that are not considered minimum essential coverage (MEC). Wellness programs that are an element of other minimum essential coverage and on-site medical clinics (excepted benefits) are not subject to the reporting rules.
MEC that supplements the primary plan of the same plan sponsor or MEC that supplements Medicare are not subject to reporting as well.
Self-Insured Plan Sponsor – Solicitation of Missing Taxpayer Identification Numbers:
A reporting entity for the 6055 requirements that fails to comply with the filing and statement requirements may be subject to penalties for failure to file a correct information return or furnish a correct employee statement. The penalties may be waived if the failure was due to reasonable cause and not willful neglect.
Although there are some minor caveats, the regulations indicate that if a TIN for a covered employee and/or family member is not on file the first solicitation should occur by the end of this year. Assuming the employer is unsuccessful with request one, the second request should be made by no later than December 31, 2015. If the employer is still unsuccessful in obtaining the social security number again, and the information of both requests is properly documented, the self-insured plan sponsor would not be penalized if its section 6055 reporting was submitted with a date of birth for the member in place of the required TIN. The regulators have indicated that one additional solicitation must be made by December 31, 2016 (request 3) for the employer to be considered “acting in responsible manner”. A fourth request is not necessary.
Note: Fully-insured applicable large employers are not required to solicit TINs because these identification numbers are not required under the 6056 reporting requirements for fully-insured health coverage.
Simplified Reporting Option:
The final rules provide a simplified method for reporting the cumbersome employee specific monthly information that is required. The employer may attest that it provides a “qualifying offer”. See IRS Fact Sheet for details.
HBI will be releasing more details as information become available.
Resource: Internal Revenue Bulletin: 2014-13
Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.
Additionally, the messages and content within the Pittsburgh Health Care Reform group do not reflect the advisory services of Henderson Brothers, Inc.
