Final regulations released on large employer coverage reporting (Sec. 6056)
Update to previous alert from July 26, 2013: IRS issues formal notice delaying employer mandate and coverage reporting until 2015
May 21, 2014
On March 5, 2014, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released final rules to implement the information reporting requirements for insurers and certain employers under the Affordable Care Act (ACA).
These final rules are meant to simplify the process of information reporting to the IRS while making it easier for employers and insurers of all sizes to provide quality, affordable health coverage.
IRS Section 6056 requires applicable large employers (defined as an employer with 50 or more full-time equivalent employees) to report information to the IRS regarding the health care coverage they have offered to their employees, for purposes of compliance with the ACA’s employer shared responsibility requirements.
Section 6056 also requires employers to provide related statements to employees so that employees may use the statements to help determine whether, for each month of the calendar year, they can claim premium assistance tax credit on their tax returns. Section 6056 requires annual reporting of the following information to the IRS and to individuals:
- Name, address and employer identification number of the applicable large employer;
- Name and telephone number of the applicable large employer’s contact person;
- The date the return is filed and the calendar year for which the information is being reported;
- Certification as to whether the employer offers its full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, by calendar month;
- The months during the calendar year for which coverage under the plan was available;
- Number of full-time employees for each month during the calendar year;
- Name, address and SSN/TIN of each full-time employee during the calendar year and the months (if any) during which the employee were covered under any health plans offered by the employer;
- For each full-time employee, the 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;
- Any additional information as requested by the IRS in guidance, forms, or instructions.
Below are some of the key changes made in the final rule on reporting minimum essential coverage by applicable large employers under Section 6056:
Self-Insured Employers May Combine Reporting: Self-insured applicable large employers will have a single, consolidated form (1095-C) to report to the IRS and employees for purposes of both Section 6055 and Section 6056 reporting.
Alternative Reporting Methods: Some alternative reporting methods are made available based upon whether the employer generally provides minimum essential coverage meeting the minimum value standard to nearly all employees and their spouses and/or dependents.
Penalty Relief: Penalty relief is available for the first reporting year and provided to filers who show they have made a good faith effort to comply with information reporting requirements. However, this relief is not available for entities that fail to file accurate returns or furnish accurate statements.
Reports must be filed with the IRS by Feb. 28 (March 31 if filed electronically) and statements must be provided to full-time employees on or before Jan. 31 of each year.
This rule is applicable to calendar years beginning after Dec. 31, 2014. The first reporting will occur in 2016 for 2015 plan years.
More information can be found at:
The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.