Date: Jul 01, 2014
Magazine:
July 2014: The Doctor Tells All-Link Between Cancer & Nutrition

Dear Jon,

I’ve heard all sorts of news about employers being required to report information to the IRS about the types of health benefits they offer to their employees.  I’m at a loss about how this works and when I have to report.

—Reaching in Reedley

 

Dear Reaching,

General Rule

The Patient Protection and Affordable Care Act (the “ACA”) added two sections to the Internal Revenue Code that require information about health coverage be reported to the IRS and to enrolled employees. The reporting requirements were delayed and do not start until 2016 for information about 2015.

Who is Required to Report?

First, under IRS Code section 6055, providers of minimum essential coverage are deemed to be reporting entities and are required to file an annual report about the prior year’s coverage.  Reporting entities include insurers and self-funded plans (like Western Growers Assurance Trust, “WGAT,” which is a self-funded multiple employer welfare arrangement).

Second, Code section 6056 requires employers with 50 or more full-time employees (including full-time equivalents) to report to the IRS and to employees, information about health coverage offered to employees.  Generally speaking, small employers will not be required to report; however, all employers that participate in a multiple employer welfare arrangement (like WGAT) will be required to comply with Code section 6055.

What is Reported?

Under Code Section 6055, insurers and employers that sponsor self-funded plans (like employers that participate in WGAT) must provide the following information to the IRS:

•   The name, address, and employer identification number of the reporting entity (the self-funded employer’s EIN or the insurers EIN as applicable)

•   The name, Tax Identification Number (“TIN,” e.g. social security number), and address of the “Responsible Individual” (which means the primary enrollee like the employee, former employee, parent or other related person named on the application who enrolls one or more individuals in coverage);

•   The name and TIN for each enrolled individual.  If the TIN is not available, birth date may be substituted, but only after two annual unsuccessful, attempts are made to obtain the TIN

•   There is no reporting requirement for individuals who are offered coverage, but waive or fail to enroll

•   The dates of coverage, meaning the months when each individual was eligible and covered for least one day during the month; and

•   Employer identification number (“EIN”)

•   If the employer is self-funded (like WGAT employers) this is the EIN of the employer

•   If the coverage is through an insurance company, the insurer reports the employer’s EIN

•   If the coverage is through the Small Business Health Options Program (“SHOP”), the insurer reports the employer’s EIN

Under Code Section 6055, insurers and self-funded plans must also provide an annual statement to “Responsible Individuals” that includes:

•   The name, address, and contact number for the reporting entity; and

•   The information that was reported to the IRS with respect to the relevant covered individual

Under Code Section 6056, large employers are required to report the following information to the IRS:

•   The name, address, and EIN of the large employer

•   The name and telephone number of the large employer’s contact person

•   The calendar year for which the information is being reported

•   A certification about whether or not the large employer offered its full-time employees (and dependents) the opportunity to enroll in minimum essential coverage through an employer sponsored plan by calendar month

•   The months of the calendar year when minimum essential coverage was available

•   For each full-time employee, the employee’s share of the lowest cost monthly contribution for self-only coverage that provides minimum value offered to that employee on a month to month basis

•   The number of full-time employees for each month during the calendar year

•   The name, address and TIN of each full-time employee during the calendar year and the months, if any, when the employee was covered

•   Information about whether or not the coverage offered to full-time employees and dependents provides minimum value and whether the employee had the opportunity to enroll his or her spouse

•   The total number of employees by calendar month

•   Whether an employee’s dates of coverage were affected by a permissible waiting period

•   Whether a large employer had no employees on a month-to-month basis

•   Whether the large employer is part of a controlled group or aggregated group

•   Whether the large employer contributes to a multi-employer plan

•   If a third party is reporting on behalf of the large employer; the name, address, and TIN of the third party (in addition to the name address, and EIN of the large employer)

Under Code Section 6056, large employers are required to report the following information to the full-time employees:

•   The name, address, and EIN of the large employer

•   The information reported to the IRS under Section 6056 with respect to the relevant full-time employee

How Is the Information Reported?

Under Code Section 6055:

•   Insurers are required to use Forms 1094-B and 1095-B

Under Code Section 6056

•   Large employers are required to use Forms 1094-C and 1095-C

Employers that are large and sponsor a self-funded plan have obligations under both Code Sections 6055 and 6056.  These employers may file a combined report under 1095-C.  The IRS may make additional forms available for reporting.

When Must the Information to Be Reported?

Reporting entities (insurers and self-funded plans) and large employers must file their first returns with the IRS on or before February 28, 2016 (March 31, 2016 if filing electronically), and thereafter, annually.

For more information about this article or if you have other questions about health care reform, contact our health care reform team today at HealthCareReform@wga.com or 800-333-4WGA.  Write to Dear Jon at dearjon@wga.com.

For more information and resources on Health Care Reform, visit www.wgat.com/health-care-reform

WG Staff Contact

Jonathan Alexander
Vice President & PCMI Compliance
949-885-2330

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