The Affordable Care Act added two new statutory provisions that require reporting: Section 6055 and Section 6056.
Section 6055 reporting relates to the Individual Shared Responsibility Mandate under ACA (aka the “Individual Mandate”). It allows the IRS to identify those individuals covered under minimum essential coverage (MEC) and the duration of their coverage.
Who is required to report? The “Coverage Provider” is the responsible reporting party.
For fully insured plans, the Coverage Provider is the insurance carriers.
For self-insured plans, the Coverage Provider is the Plan Sponsor.
For whom is the responsible entity required to report? All Employees
This not limited to employees and former employees. It is very broad and includes:
What is the Coverage Provider required to report? The report must identify each month that the responsible individual and any dependents were covered under the plan at least 1 day. (Do not need to worry about current status, only look at if they had coverage for at least 1 day.)
What is MEC? Minimum Essential Coverage (MEC) is any health plan that provides other than excepted benefits. Affordability is not relevant and minimum value is not relevant.
How does the Coverage Provider report? Reporting is done on Form 1094 and 1095 using either the B-series or C-series.
Covered Providers will prepare the applicable form for each “responsible individual” and his/her covered dependents. A “responsible individual” is generally the person with the enrollment rights.
Which forms need to be used? If the employer is not an ALE member then the B-series forms need to be used.
If the employer is an ALE member, then:
How does the Coverage Provider report to the responsible individual? The Form 1095 must be furnished to the last known address of the responsible individual via first class mail. Electronic distribution is allowed if there is advance consent provided by the responsible individual.
Forms are generally due January 31 following the reporting year (a 30 day extension may be permitted upon request). However, each year since the reporting has been implemented an extension has automatically been given via a Notice.
The Form 1095s distributed to the responsible individuals are not required for the filing of taxes, they are informational forms only.
How does the Coverage Provider report to the IRS?
The Form 1094 must be filed with the IRS. Along with the Form 1094 the Coverage Provider will also be submitting copies of the Form 1095s sent to responsible individuals.
Section 6056 reporting relates to the Employer Shared Responsibility Mandate under ACA (aka “Pay or Play”). It allows the IRS to verify which employers meet the obligations under Section 4980H and if a penalty needs to be assessed.
Fully insured status or self-insured status does not matter for Section 6056 reporting. If an employer is an ALE member and has at least 1 employee who qualified as a Section 4980H full-time employee then Section 6056 reporting is required.
Who is required to report? Each applicable large employer is required to report.
For whom is the responsible entity required to report? Any individual who was a full-time employee at least 1 month during the calendar year needs to be reported. (The plan year of the plan is not relevant.)
What information is required to be reported? The required information will show if an offer of coverage was made, the cost of that coverage to see if it was affordable, and if the responsible individual accepted coverage.
How does the Coverage Provider report? Reporting is done using the Form 1094C and Form 1095C.
How does the Coverage Provider report to the responsible individual? The Form 1095 must be furnished to the last known address of the responsible individual via first class mail. Electronic distribution is allowed if there is advance consent provided by the responsible individual.
Forms are generally due January 31 following the reporting year (a 30 day extension may be permitted upon request). However, each year since the reporting has been implemented an extension has automatically been given via a Notice.
The Form 1095s distributed to the responsible individuals are not required for the filing of taxes, they are informational forms only.
How does the Coverage Provider report to the IRS?
The Form 1094 must be filed with the IRS. Along with the Form 1094 the Coverage Provider will also be submitting copies of the Form 1095s sent to responsible individuals.
With a little help from you we can streamline this process on your behalf. Your role in this process would be completing a small portion on an excel file. This would require you to add dates of coverage and hire dates for your employees. If you are a current client, we will pull the rest of the information we need for the filing from our system.
After the excel template has been completed we will convert that information in the codes required for reporting. We will e-file both your 1095s and your 1094 transmittal form to the IRS.
The forms will simultaneously be e-filed and printed. We will send all 1095 forms to your employees homes as required by ACA. This information comes directly from the excel template file that we have you help with at the beginning of the process. So be sure that it is accurate! If you wish to allow your employees to receive the forms via email, you can include that information on the initial template.
Often times the IRS will find errors between the information that an employer reports for their employees and the information they have on file. These errors are mostly a TIN Validation problem. This means that the employees name or TIN is not matching up to the IRS. If thee are any errors returned by the IRS, RCI will work with you to get those corrected. We will have you verify that all information filed is correct and then we will file a corrected return. It will follow the same e-file and print and mail process outlined above. This is all included in our pricing and is not an extra fee.
Alexa Fulk is your contact for all things 1095. You can reach her at alexa.fulk@regionalcare.com or by calling her at 800-795-7772.