New Guidance on Information Reporting Requirements Under the Affordable Care Act
by Meredith K. Olafson, Community Moderator
- Created: September 10, 2013, 3:24 pm
- Updated: September 10, 2013, 3:50 pm
Under the provisions of the Affordable Care Act, those employers that are subject to the Employer Shared Responsibility provisions must report certain information regarding the health coverage they offer their full-time employees (known as Section 6056 reporting). The law also requires information reporting by insurers, self-insuring employers, and other parties like governmental entities that provide health coverage to individuals (Section 6055 reporting). These reporting provisions take effect on January 1, 2015, and the first reports are due to the Internal Revenue Service in early 2016.
Last week, the U.S. Department of the Treasury and the IRS issued proposed regulations that provide further guidance about these information reporting requirement designed to help streamline and simplify the requirements under the law.
What Must Employers, Insurers, and Other Reporting Entities Report Under these Rules?
The Affordable Care Act calls for employers, insurers, and other reporting entities to report to the IRS, among other things:
Section 6056 Reports For Employers That Are Subject to Employer Shared Responsibility (Those with 50 or More Full-Time or Full-Time Equivalent Employees):
- Information about the employer that is offering health coverage (including contact information for the employer and the number of full-time employees).
- The names, addresses, and taxpayer ID numbers of the employer’s full-time employees and information about the coverage offered to each such employee, by month, including the cost of self-only coverage.
Section 6056 also requires these employers to provide written statements to their full-time employees that includes the contact information for the employer and the information required to be shown on the section 6056 reports with respect to the full-time employee so that employees may use the statements to help determine whether, for each month of the calendar year, they can claim an individual premium tax credit on their tax returns. The first employee statements must be provided in early 2016 as well.
In addition, information from these reports will be used to administer and ensure compliance with the eligibility requirements for the Employer Shared Responsibility provisions and the individual premium tax credit.
Section 6055 Reports For Insurers, Self-Insuring Employers, and Other Parties That Provide Health Coverage:
- Information about the entity providing coverage, including contact information.
- The name of each individual enrolled in minimum essential coverage along with taxpayer ID numbers and the months they were covered.
How Do These Proposed Regulations Help to Streamline Reporting Requirements?
The proposed regulations issued by Treasury reflect comments received and an ongoing dialogue with a variety of stakeholders, many of whom already offer their full-time workforce coverage far exceeding the minimum Employer Shared Responsibility requirements.
The proposed rules describe a variety of options to potentially reduce or streamline information reporting, such as:
Replacing section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.
Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.
Allowing employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount.
Allowing self-insured group health plans to avoid furnishing employee statements under both section 6055 and section 6056 by furnishing a single substitute statement.
Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.
How Can I Submit Comments on These Proposed Rules and Where Can I Go to Get More Information?
Employers and other stakeholders are invited to submit written or electronic comments on both the Section 6056 and 6055 proposed rules by November 8, 2013. Public hearings on these proposed rules are scheduled for mid-November, and these public comments will be taken into account in developing the final regulations for these reporting rules.
Once the final rules have been published, reporting entities will be encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions starting in 2015.
The proposed rules can be viewed on the Federal Register:
About the Author
Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration where she oversees the agency's education and outreach efforts around health care and the Affordable Care Act.
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This blog is provided for informational purposes only and is not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how these matters relate to their individual business circumstances.
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