On March 10, 2014, the IRS released final regulations detailing the reporting requirements for information returns and individual statements under Code §§ 6055 and 6056 to administer tax provisions of the Affordable Care Act. The first filings will be due in early 2016 for coverage provided in 2015. This update summarizes the key elements of the final regulations.
Reason for Report
This particular report is designed to help with the administration of the individual mandate. Entities must report for individuals enrolled in minimum essential coverage.
This report is designed to help determine whether “play or pay” penalties are assessable, as well as whether subsidized Exchange coverage is available to FT individuals. Entities must report for all FT employees. What constitutes a full-time employee is determined under Section 4980H and any applicable guidance.
- Self-insured Plans: Plan Sponsors report
- Fully-insured Plans: Insurers report
Fully-insured and self-insured applicable large employers (at least 50 full-time employees, including full-time equivalents).
Separate reporting for coverage that supplements the primary plan of the same plan sponsor, including HRAs that supplement an HDHP that is minimum essential coverage is NOT required.
The regulations do not include the same “supplemental coverage” exemption illustrated in Section 6055. Further guidance would be welcome.
- Insurers & Multi-employer Plans: Form 1095-B employee statement with transmittal form 1094-B
- Self-insured employer: 1095-C employee statement with transmittal form 1094-C
- Or any other forms designated by the IRS
- All Applicable Large Employers: 1095-C employee statement with 1094-C transmittal form or other forms the IRS designates
- Self-insured employers complete the entire 1095-C form, fully-insured employers complete a portion of the form
Additional Details – Section 6055 & 6056
Controlled Groups Reporting
Each separate employer entity of a controlled group is responsible to report for its employees; however, one member of the group may assist the other members by filing returns and furnishing statements on behalf of other members of the controlled group.
Transmittal Due Date
The required return and transmittal form is due on or before February 28 (March 31 if filed electronically) of the year following the calendar year in which the entity provided MEC to individuals. First paper report is due by Monday, March 1, 2016 for calendar year 2015.
Participant Statements Due Date
A reporting entity must furnish a statement to each responsible individual (subscriber participant) by January 31st of each year. The statement identifies information reported to the IRS for the participant. The final regulations allow reporting entities the flexibility to apply for a maximum 30 day extension to furnish statements and permit the entity to furnish Form 1095-B or 1095-C with the Form W-2 in the same mailing.
Required if the reporting entity is required to file at least 250 Forms.
Mailing Participants Statements
When mailed, the participant statement must be sent to the individual’s last known permanent address or, if no permanent address is known, to the individual’s temporary address. This is acceptable even if the statement is returned.
The final regulations allow reporting entities to furnish statements electronically if an individual affirmatively consents in writing that electronic disclosure is acceptable(i.e., DOL safe harbor for electronic disclosures). The reporting entity must be specific with its request for consent, asking the participant to provide consent to receive the 6055 statement electronically (i.e., specifically identify “6055 statement” in the request for consent).
Information in Participant Statement
- Name, address, and contact information of the reporting person; and
- The information required to be shown on the IRS return with respect to that individual
Information Disclosed to IRS
- Name, address and EIN of plan sponsor
- Name, address and TIN* of primary insured and covered family members
- Months covered during year
- Insurer must identify if the coverage offered is a QDHP through a qualified Exchange and whether premium subsidy or cost-sharing assistance is applicable to the member
- And – any other information the IRS may require for the administration of the new tax credit for eligible small employers
* Reporting entity must solicit TIN twice, if not received, may report DOB
Note: Some of this required information will be reported via indicators or codes
- Name, address, and EIN of the applicable large-employer member
- Telephone number of contact person
- Calendar year reported
- A certification (by calendar month) as to whether MEC was offered to full-time employees and their dependents
- Months coverage under the plan was available
- Each full-time employee’s share of the lowest-cost monthly premium (self-only) for coverage providing minimum value offered to that full-time employee by calendar month
- The number of full-time employees the applicable large-employer member had for each month during the calendar year
- The name, address and TIN for each FT employee and the months, if any, in which the employee was covered by the Plan
- Certification that coverage meets minimum value standards and spouses are entitled to enroll
- Total number of employees, by calendar month
- Whether an employee’s effective date of coverage was affected by a permissible waiting period by calendar month;
- Assorted information pertaining to applicable large-employer members that are a contributing employer to a multi-employer plan
- Whether minimum essential coverage meeting minimum value was offered to the employee only, the employee and the employee’s dependent’s only, the employee and the employee’s spouse only, or the employee and the employee’s spouse and dependents
- Coverage was not offered to the employee because the employee was in a limited non-assessment period for certain employees, the employee was not FT, the employee was not employed by the employer during that month, coverage was offered though the employee was not FT for that month, the employee was covered under the plan, the employer met a specific safe harbor for affordability with respect to the employee
- And – any other information required by the IRS
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.
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