As of January 2015, employers are subject to extensive ACA reporting requirements. Although submission of the data for 2015 will not take place until early 2016, employers and insurers need to begin capturing the required data in January. Therefore, employers need to plan and ensure that all the proper data can be captured and tracked prior to the beginning of the year.
The rules require extensive data reporting and are intended to help the IRS enforce various tax provisions of the ACA, including the employer and individual mandates. Proposed instructions for reporting and draft forms were issued by the IRS at the end of August.
American Westbrook has been informed that select health insurance carriers may or may not provide employer groups with some of the employee data that will need to be reported. We suggest you contact your insurer directly to inquire if they will provide you with the necessary data.
Employer Mandate Reporting – IRC Section 6056
Employers with more than 50 full-time equivalent employees are required to report if they made a “qualifying offer” of coverage to individual full-time employees and their dependents on a per month, per employee basis. The required amount of data is extensive and includes:
- Name, address, and SSN of each full-time employee and the months, if any, during the calendar year which the employee was covered under the health plan;
- The months for which minimum essential coverage 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 under an eligible employer-sponsored plan, by calendar month; and
- The number of full-time employees for each month during the calendar year.
Individual Mandate Reporting – IRC Section 6055
Employers with self-funded plans (including those with under 50 employees) and insurers are required to report overall information on the plan and the plan sponsor, as well as data for each individual covered under the plan. The required individual information includes:
- Name, address, and SSN (or date of birth if SSN not available) of each individual covered; and
- Months during the calendar year when the individual was covered.
Timing and Implications
Under both IRC Sections 6055 and 6056, the reporting entity (employer or insurer) is required to report data on the prior calendar year to employees by January 31, 2016 and to the IRS by March 31, 2016.
Although reports will first be submitted in early 2016 for calendar year 2015, the reporting period begins January 1, 2015—meaning that employers need to start capturing the needed data then. Employers must take necessary steps now to ensure that all required data can be tracked prior to the first of the year.
Statements must be provided to all covered employees on or before January 31st of the year “immediately following the calendar year to which the information relates.” The first employee statement that will be filed in 2016 for the 2015 year must be furnished no later than February 1, 2016 since January 31, 2016 falls on a Sunday. This time frame is the same as that for IRS Form W-2.
The following IRS forms have been finalized for reporting. Visit www.irs.gov for the following forms:
- 1095-B: Provides information on coverage provided to an enrollee of a fully insured or self-funded plan.
- 1094-B: This is the transmittal form that insurers and self-funded employers will submit to the IRS along with Form 1095-B.
- 1095-C: This is provided by large employers to each enrollee. It provides information on the coverage provided and when coverage was offered.
- 1094-C: This is the transmittal form that accompanies Form 1095-C.
- 1095-A: This is the statement that the exchanges will provide to their enrollees.
Again, American Westbrook’s Health Care Reform Specialist, Sheri Mendoza, is here to help should you have any questions or require further clarification. Sheri can be reached at 630.571.6364 or firstname.lastname@example.org.
Contributors/Sources for this Advisory notice include: Kelly Haab-Tallitsch of Smith Amundsen and irs.gov