Code section 6056, as enacted by the Patient Protection and Affordable Care Act (ACA), requires “applicable large employers” subject to the employer “shared responsibility” mandate (Code section 4980H) to report to the Internal Revenue Service (IRS) information about their compliance with the mandate and any health care coverage offered to employees.
Section 6056 also requires those employers to furnish related statements to employees so that the employees may use the statements to help determine eligibility for the ACA premium tax credit. A similar reporting requirement in Code section 6055 requires health insurance issuers and employers that sponsor self-insured plans to report and provide statements on minimum essential coverage offered under their plans.
On July 2, 2013, the Department of Treasury announced it was issuing transition relief to delay the implementation date of the Code section 6055 and 6056 information reporting provisions and the employer mandate requirements from 2014 until 2015. The IRS subsequently issued Notice 2013-45 formalizing the transition relief and delayed implementation date. On September 9, 2013, the Department of the Treasury and IRS published proposed regulations on the Code section 6055 (78 Fed. Reg. 54986) and section 6056 (78 Fed. Reg. 54996) reporting requirements. It is likely that final regulations on these ACA reporting requirements will be published later this year.
What information must be reported to the IRS by large employers subject to the employer mandate requirement?
In general, the proposed regulation under Code section 6056 requires that an applicable large employer provide a separate return with respect to each full-time employee (accompanied by a single transmittal form for all of the returns filed for a calendar year) that includes the following information:
- Name, address, and employer identification number (EIN) of the employer;
- Name and telephone number of the applicable large employer’s contact person;
- Calendar year for which the information is reported;
- Certification as to whether the employer offered its full-time employees and their dependents the opportunity to enroll in minimum essential coverage under a eligible employer-sponsored plan, by calendar month;
- Months during the calendar year that coverage under the plan 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 applicable employer-sponsored plan, by calendar month;
- Number of full-time employees for each month during the calendar year;
- Name, address and taxpayer identification number (TIN) of each full-time employee during the calendar year and the months, if any, during which the employee was covered under the plan; and
- Any other information prescribed by forms or instructions.
The return may be made on IRS Forms 1094-C and 1095-C or other forms or substitutes designated by IRS.
Notably, the proposed regulation dropped from the reporting requirement certain information in the ACA statutory language (e.g., the length of any waiting period for the coverage). However, the preamble to the proposed regulation states it is anticipated that certain additional information will be requested, generally through the use of indicator codes, including certain information that was not specifically required in the statute (e.g., whether the coverage meets minimum value; the total number of employees by calendar month; whether an employee’s effective date of coverage was affected by a waiting period).
What information must be provided to the employer’s full-time employees under section 6056?
In general, an applicable large employer that files a return with IRS under section 6056 will also be required to provide each full-time employee identified on the return with a statement showing (1) the name, address, and employer identification number of the employer, and (2) the information required to be included on the IRS return with respect to that full-time employee. The statement may be a copy of the IRS Form 1095-C or another substitute form designated by IRS.
What is the deadline for providing the IRS returns and employee statements?
The proposed regulation provides that the return must be filed with the IRS annually no later than February 28 (March 31 if filed electronically) of the year immediately following the calendar year to which the return relates. Each employee statement must be furnished to a full-time employee on or before January 31 of the year succeeding the calendar year to which the return relates. An employer may file a written application to the IRS to receive a maximum 30 day extension of time to furnish the required statements to full-time employees for good cause.
Under the transition relief provided in Notice 2013-45, the first returns and statements for the 2015 calendar year would be due in early 2016. The IRS does, however, encourage employers to voluntarily comply for 2014 (i.e., for the returns and statements due in early 2015) so as to provide “real-world” testing of reporting systems.
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You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html.
Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C. She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare. She represents employers designing health plans as well as insurers designing new products. Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.
Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.
PLEASE NOTE: This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.