IRS Information Reporting Requirements under the Affordable Care Act   

takes effect in 2015

The U.S. Department of the Treasury and the IRS released final rules implementing the information reporting provisions, under the Affordable Care Act (ACA) for employers who have 50 or more employees (commonly referred to as an applicable large employer or ALE). The new annual reporting requirements are to inform the IRS about who has access to minimum essential coverage (MEC) and when an employer shared responsibility assessment is owed. (Employers with fewer than 50 full-time employees are exempt from the ACA employer shared responsibility provisions and therefore are not subject to the employer reporting requirements.)

IRC §6055 will enforce minimum essential coverage for the individual mandate. IRC §6056 will enforce employer shared responsibility requirements around the employer mandate. Both filings will be due to the IRS no later than February 28th of each year (or March 31^st of each year, if filed electronically), reflecting information for the previous calendar year. The first filing year is 2016 for the calendar year of 2015. To date, the IRS has not yet finalized the form number for this filing.

Single, Combined Form for Information Reporting

Employers that are subject to the employer responsibility provisions and "self-insure" will need to file a single, consolidated form that is divided into two sections, the top half includes information needed for §6056 and the bottom half includes the information needed for §6055. Both portions will need to be completed for information reporting.

Employers subject to employer responsibility but do not "self-insure" will complete only the top half of the combined form (§6056). Insurers and other providers of health coverage will report only under §6055, using a separate form for that purpose. Insurers do not have to report those enrolled in the Health Insurance Marketplace since the Marketplace is required to supply data on individuals' covered there.

Simplified Option for Employer Reporting "Qualifying Offer"

Employers that provide a qualifying offer that is, an offer of minimum value coverage that provides employee-only coverage at a cost to the employee of no more than about $1,100 in 2015 (9.5% of the federal poverty level), combined with an offer of coverage for the employee's family, to any of their full-time employees, the final rules provide a simplified alternative to reporting monthly, employee-specific information on those employees.

• For employees who receive qualifying offers for all 12 months of the year, employers will need to report only the Name, addresses and taxpayer identification number (TINs) of those employees and the fact that they received a full-year qualifying offer.

Also, employers will be required to supply to their individual employees a copy of that simplified report or a standard statement indicating that the employee received a full-year qualifying offer. The statement must be supplied by January 31 of each year based on prior calendar plan year information. The statements may be provided electronically.

• For employees who receive a qualifying offer of less than 12 months of the year, employers will simplify reporting to the IRS and to employees for each of these months by entering a code indicating that the qualifying offer was made.

Employers certifying that they have made a qualifying offer to at least 95% of their full-time employees (plus an offer to their families) may use the streamlined reporting method for their entire workforce, including for any employees who do not receive a qualifying offer for the full year. Those employers will provide employees with standard statements relating to their possible eligibility for premium tax credits.

Employers will also have the option to avoid identifying in the report which of its employees are full-time, and instead just include in the report those employees who may be full-time. To take advantage of this option, the employer must certify that it offered affordable, minimum value coverage to at least 98 percent of the employees on whom it is reporting.

Types of Required Information  

Section 6056:

• Name, address, and employer identification number (EIN) of the ALE;
• Name and telephone number of a contact for ALE;
• Calendar Year for which the report is filed (reports are based on calendar year not plan year);
• Reporting on a calendar month basis the following:
  • Certification as to whether the ALE's full-time employees and their dependents, including spouses, are given an opportunity to enroll in MEC,
  • The number of fulltime employees employed by ALE,
  • The months for which MEC was offered, and
  • The employee's share of the monthly premium for single health coverage that meets minimum value; and
  • The name, address and TIN number for each full-time employee offered coverage.

Section 6055:

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

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

• Name, address, and EIN of the employer sponsoring the plan; and
• Whether the coverage is a qualified health plan enrolled in through the Small Business Health Options Program (SHOP) and the SHOP's unique identifier.