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September 18, 2013

HRB 82 - Information Reporting by Employers on Health Coverage and Reporting of Minimum Essential Coverage

Released September 18, 2013I Download as a PDF

September 18, 2013 -- The Affordable Care Act includes many reporting and disclosure requirements.  Among these are two Internal Revenue Code Section reporting requirements found in IRC Sections 6055 and 6056.  These Code Sections require plans and employers to provide information to the government about the plan and who is covered by the plan.  In addition, these Code Sections require benefit statements to be provided to the insureds, similarly advising them about the nature of the coverage.  The purpose of these Code Sections is to provide information both to the government and to the insureds that will assist in assessing employer shared responsibility, as well as individual shared responsibility and entitlement to premium assistance in the form of a tax credit. 

Because the actual reports had not been finalized, the IRS announced a delay of these reporting requirements until 2015 (see CBIZ HRBs, IRS Guidance on Delay of Employer Shared Responsibility Reporting Requirements (7/10/13) and Employer Shared Responsibility Reporting Requirements Delayed and Final Exchange Regulations (7/3/13)). 

On September 9, 2013, the IRS and Treasury issued proposed regulations, flushing out details of the Sections 6055 and 6056 reporting requirements.   At this point, these regulations are proposed only, and there is nothing specific for employers and health plans to do other than be aware of the types of obligations that are in the offing.  

IRC Section 6055 Reporting

The type of information required to be reported to the IRS on the proposed Form 1095-B, for Code Section 6055 purposes, includes the following information for each calendar year:

  1. Name, address, and EIN for the person required to file the return;
  2. Name, address, and TIN, or date of birth of the responsible individual;
  3. Name and TIN, or date of birth of each individual covered under the policy or program; and
  4. For each covered individual, the months for which the individual was enrolled in coverage and entitled to receive benefits. 

In addition, information returns reporting minimum essential coverage provided to an individual under an insured group health plan must report:

  1. Name, address, and EIN of the employer sponsoring the plan;
  2. Whether the coverage is a qualified health plan enrolled in through the Small Business Health Options Program (SHOP) and the SHOP's unique identifier; and
  3. Other information specified in forms, instructions, or published guidance.

Timing of filing.  The report is required to be filed with the IRS no later than February 28th of each year (or March 31st of each year, if filed electronically), reflecting information for the previous calendar year.

Benefit Statements to Employees

Employers submitting a return, pursuant to Section 6055, must furnish the same information to all individuals named in the return, together with the contact phone number of the individual filing the return and the policy number.  This can be accomplished by providing a copy of the Form 1095-B, or similar substitute statement as prescribed by the IRS.  These benefit statements must be provided annually by January 31st and are based on prior calendar plan year information.  These statements may be provided electronically, as long as the electronic distribution standards contained in the regulations are followed.

IRC Section 6056 Reporting

Section 6056 requires employers to report to the IRS information about their compliance with the employer shared responsibility provisions including the type of health care coverage they offer to their employees.  In addition, employers are required to furnish related benefit statements to employees to assist them in determining whether they can claim a premium tax credit on their tax return. 

The IRS Form 1095-C (employee statement) or a Form 1094-C (transmittal) are the proposed designated forms to be used for Section 6056 reporting.  At minimum, following is information that will be requested on the form:

  1. The employer’s name, address, EIN;
  2. Name and phone number of the employer’s contact person;
  3. Identification of the calendar year for which the information is reported;
  4. Certification as to whether the employer offered to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under its group health plan by calendar month;
  5. The months during the calendar year for which coverage under the plan was available;
  6. 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 under the employer-sponsored plan, by calendar month;
  7. The number of full-time employees for each month during the calendar year; and
  8. The name, address, and taxpayer identification number of each full-time employee during the calendar year and the months, if any, during which the employee was covered under the plan.

Timing of filing.  The report is required to be filed with the IRS no later than February 28th of each year (or March 31st of each year if filed electronically), reflecting information for the previous calendar year.

Benefit Statements to Employees

Full-time employees must be furnished with a written statement derived from information contained in the employer’s report.  This can be accomplished by providing a copy of the Form 1095-C, or similar substitute statement as prescribed by the IRS.  These benefits statements must be provided annually by January 31st and are based on prior calendar plan year information.  These statements may be provided electronically, as long as the electronic distribution standards contained in the regulations are followed.

Effective Date.  Written comments on these proposed regulations must be received by November 8, 2013.  These regulations are proposed to apply for calendar years beginning after December 31, 2014.

Simplified Reporting.  The preamble to both sets of the regulations contemplates trying to simplify some of the reporting requirements.  A self-funded employer, for example, at this point is subject to at least 5 health coverage reporting obligations including the Section 6055 report to the IRS, a Section 6055 report to the employees, a Section 6056 report to the IRS, a Section 6056 report to the employees, and a Form W-2 reporting of health coverage (which became effective for the 2012 tax year).  Hopefully, the final regulations will allow some streamlining of these reporting requirements.  We will monitor the situation and update you as regulations and reporting forms are finalized.

 

About the Author:  Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc.  She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law.  Ms. McLeese is based in the CBIZ Leawood, Kansas office.

 

 

 

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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