The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056. Under these new reporting rules, employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees and who was covered. It is meant to provide the government with information to administer other ACA mandates, such as the large employer shared responsibility penalty and the individual mandate.
The ACA requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC) to file an annual return with the IRS reporting information for each individual who is provided with this coverage.
The forms and instructions are very complex and it is helpful to understand the purpose of the forms before embarking on learning how to complete them.
Forms 1094-B and 1095-B (Employers with less than 50 FT or FTE employees). Employers with less than 50 full-time employees must use Forms 1095-B and 1094-B to report information about enrollment in health plans. Form 1094-B must be used to report summary information to IRS for each employer and to transmit Forms 1095-B to the IRS. These forms will be used in determining the eligibility of employees for the premium tax credit.
(i.e. These forms will provide information to the IRS about individuals who have minimum essential coverage (MEC) under the plan and therefore are not liable for the individual shared responsibility payment.)
Forms 1094-C and 1095-C (Employers with 50 or more FT or FTE employees). Employers with 50 or more full-time employees (Applicable Large Employers (ALEs)) must use Forms 1095-C and 1094-C to report information about offers of health coverage and enrollment in health plans. Form 1094-C must be used to report summary information to IRS for each employer and to transmit Forms 1095-C to the IRS. These forms will be used in determining whether an employer owes a payment under the employer shared responsibility provisions under section 4980H and in determining the eligibility of employees for the premium tax credit.
(i.e. These forms provide information to the IRS on the details on the plan an individual was offered and information about individuals who have minimum essential coverage under the plan and therefore are not liable for the individual shared responsibility payment.)
The IRS has issued the following instructions to assist with the completion of these forms:
• 2014 Instructions for Forms 1094-B and 1095-B
• 2014 Instructions for Forms 1094-C and 1095-C
These can be found on the IRS website at http://www.irs.gov/Affordable-Care-Act/Affordable-Care-Act-Tax-Provisions or doing a search on the IRS website.
To Employees: Employers must furnish the statement to each full-time employee on or before January 31 of the year immediately following the calendar year to which the information relates. This means that the first employee statements (the statements for 2015) must be furnished to employees no later than February 1, 2016 (January 31, 2016, being a Sunday).
To the IRS: Employers must file the return for each employee (Form 1095-B/Form 1095-C) and a transmittal form (Form 1094-B/1095-B) with the IRS on or before February 28 (March 31 if filed electronically) of the year immediately following the calendar year for which the offer of coverage information is reported. The first returns required to be filed are for the 2015 calendar year and must be filed no later than February 29, 2016, or March 31, 2016, if filed electronically.
The regulations require electronic filing with the IRS for employers filing 250 or more returns (i.e. 1095-C) during the calendar year. Each return for each full-time employee is counted as a separate return in applying the 250-return threshold.
RCI will be able to provide a standard report with the information required under Part IV on Form 1095-B and Part III on Form 1095-C. This report will be provided upon request for a nominal fee. If modifications need to be made to this report in order to fulfill specific data specs, additional fees may apply.
These forms require specific information on each employee (and dependents) so employers need to start looking at their HR and payroll systems now to see what information they will need and to identify any data gaps.
Required information includes, but is not limited to:
• Which employee’s were offered coverage (Form 1095-C)
• What month an employee was offered coverage (Form 1095-C)
• Employee’s name, address, and SS #/date of birth. (Forms 1095-C and 1095-B)
• Monthly premium for self-only coverage (Form 1095-C)
• The name and SS #/date of birth of each covered family member (Forms 1095-C and 1095-B)
Processes need to be created and put in place now so when the deadlines roll-around, employers will be ready.
Important note on social security numbers: Self-funded employers are required to provide SS#’s for all covered individuals, this includes the employee AND their covered dependents. If an employer does not have this information, the employer is required to make "reasonable efforts" to obtain it from the Employee, making three separate attempts within a specified timeframe. The date of birth for reporting can be used ONLY after reasonable efforts have been made.
For questions about this process, feel free to contact your Account Manager with RCI at (308) 635-2260 or (800) 795-7772.