New IRS Q&As on ACA Information Reporting by Employers and Health Coverage Providers
Two sets of recently released questions and answers from the Internal Revenue Service (IRS) provide guidance on the information reporting requirements under the Affordable Care Act (ACA). One set of Q&As relates to information reporting by health coverage providers under Internal Revenue Code (IRC) section 6055, and the other set of Q&As relates to reporting on offers of health insurance coverage by employers under IRC section 6056.
The ACA requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage (MEC) to report information on this coverage to the IRS and to covered individuals ("section 6055 reporting"). Large employers (generally those with 50 or more full-time employees, including full-time equivalents) are also required to report information to the IRS and to their employees about their compliance with the employer shared responsibility provisions ("pay or play") and the health care coverage they have offered ("section 6056 reporting").
Both sets of Q&As make clear that information reporting under sections 6055 and 6056 is voluntary for calendar year 2014. Therefore, the first section 6055 and 6056 returns required to be filed are for the 2015 calendar year and must be filed no later than March 1, 2016 (February 28, 2016, being a Sunday), or March 31, 2016, if filed electronically.
The Q&As also provide information regarding:
- The basics of employer and provider reporting;
- Who is required to report;
- Methods of reporting for employers under section 6056 (including alternative reporting methods);
- What information is required to be reported; and
- How to report the required information.
Generally, large employers will file a section 6056 return by filing a Form 1094-C (transmittal) and, for each full-time employee, a Form 1095-C (employee statement), while a health coverage provider will report under section 6055 on Form 1094-B and Form 1095-B. However, employers that are subject to both reporting provisions (generally large employers that sponsor self-insured group health plans) are permitted to satisfy their reporting obligations on Form 1095-C, which will have separate sections for reporting under section 6055 and 6056.
Draft Forms & Instructions
The Q&As also reference draft forms that were released in July to help reporting entities prepare for compliance. The following draft forms, including draft instructions, are now available:
- MEC Reporting (Section 6055)
- Large Employer Reporting (Section 6056)
The IRS intends to finalize both the forms and instructions later this year. Click here for more information on the reporting requirements.