Presentation on theme: "Employer Reporting Requirements Starting in 2016, What You Need to Report to the IRS for ACA Compliance."— Presentation transcript:
Employer Reporting Requirements Starting in 2016, What You Need to Report to the IRS for ACA Compliance
Two Kinds of ReportingTwo Kinds of Reporting The Affordable Care Act (ACA) requires two kinds of reporting under the tax code: Section 6055 Reporting – MEC Report Used by the IRS to enforce the “individual mandate” provision of the ACA. Used by individuals when they file their taxes to show months during which they were covered Section 6056 Reporting – Shared Responsibility Report Used by the IRS to enforce the “employer shared responsibility” portion of the ACA Used by individuals to prove eligibility for premium subsidy Final regulations combined the reports into a single report
Section 6055 (MEC) Reporting For insurers (and employers with self-funded plans) to report who has minimum essential coverage (MEC)
Section 6055 (MEC) ReportingSection 6055 (MEC) Reporting Who Needs to File? Employers with self-funded medical plans Carrier will file for all insured medical plans
Section 6055 (MEC) ReportingSection 6055 (MEC) Reporting What Gets Reported? The IRS wants to know who was enrolled in minimum essential coverage (MEC) to verify individual taxes for not having coverage A penalty will apply to anyone who doesn’t have coverage (no more than a 3-month break is allowed), unless they qualify for an exemption.
Section 6055 (MEC) ReportingSection 6055 (MEC) Reporting What Gets Reported? Name, address, and EIN of insurer (or employer offering self- funded coverage) Name, address, and Social Security number of each employee who is enrolled at any time during the calendar year Name, address, and Social Security number if available of each covered spouse and child Each month for which the individual was enrolled in MEC or entitled to receive benefits for at least one day of the month.
Section 6056 (ALE) Reporting For applicable large employers (ALEs) to report which employees were offered affordable, minimum- value coverage
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting Who Needs to File? Applicable Large Employers (ALEs) Employers with 50 or more full-time or full-time equivalent employees. Note that ALEs with between 50 and 99 employees are not exempt from this requirement. All ALEs must file whether they offer fully insured coverage, self-funded coverage, or no coverage. Also includes aggregated groups (such as controlled groups) but each employer member of the group must file separately.
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting What Gets Reported? EMPLOYER INFO The name, address, and employer identification number (EIN) of the employer A contact person for the employer (name and telephone number) The calendar year for which the information is filed
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting What Gets Reported? EMPLOYEE INFO: Name, address, and Social Security number of each employee who was offered coverage All the calendar months during which the employee was offered group health coverage (and, if not, a code explaining the reason) - Codes may be used for : “not employed” “waiting period” “part-time” “not eligible” The number of full-time employees in each month
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting What Gets Reported? OTHER INFO Certification as to whether the employer offered minimum essential coverage to full-time employees Whether coverage provides the required minimum actuarial value (60%) Whether coverage was offered to the employee, the employee’s spouse, and/or the employee’s dependents The employee’s monthly share for self-only coverage in the least expensive plan offering a minimum actuarial value of 60%
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting What Gets Reported? The employer will also be required to report the name, address, and EIN of a third party filing on its behalf. If the employer is a member of an aggregated group, it will need to report the names and EINs of any other aggregated group members. The employer must also report if it is a contributing member to a multiemployer plan.
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting Alternative Reporting Methods There are two simplified reporting methods that can be used under certain circumstances: Certification of Qualifying Offers Report not Identifying Full-Time Employees
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting Alternative Reporting: Certification of Qualifying Offers Employer must certify that for all months in the calendar year that the employee was full-time the following was true: The employer offered the employee minimum essential coverage that provided coverage with a minimum actuarial value of 60%; The annual cost to the employee for employee-only coverage did not exceed 9.5% of the federal poverty level for a single individual (in 2014, the cost could not be more than $1108.65 ($92.38 per month)); and Employer offered minimum essential coverage to the employee’s spouse and children, if any. For 2015, if employer made a qualifying offer to 95% of full-time employees, spouses and children Report for employees receiving a qualifying offer for all 12 months will include Employee Name, SSN and Address along with code that qualifying offer was made
Section 6056 (ALE) ReportingSection 6056 (ALE) Reporting Alternative Reporting: No Individualized Reporting with 98% Coverage Employer offers coverage that is minimum essential coverage affordable (using any of the affordability safe harbor methods) and has a minimum actuarial value of 60% to “substantially all” (at least 98%) of its full-time employees, then the employer is not required to include the names of full-time employees or the exact number of full-time employees. Form is expected to be released by the IRS soon.
Section 6055 and 6056 ReportingSection 6055 and 6056 Reporting What to File Send the following to the IRS: One single transmittal form (1094-C) to the IRS A separate return (1095-C) for each covered and full- time or enrolled employee 6055 Section completed for enrolled employees 6056 Section completed for full-time employees Send a copy of the 1095-C to each individual for whom the 1095-C was sent to the IRS.
Section 6055 and 6056 ReportingSection 6055 and 6056 Reporting When and How to Provide to Employees Copies to individuals due January 31 st Mailed to last known address of employee Electronic filing permitted if: Employee consents Disclosure statement is provided with the consent request Inform employee that paper copy is available upon request (and procedures for obtaining) Indicate how long the consent lasts Notice is provided if information is furnished on a website – “IMPORTANT TAX RETURN DOCUMENT AVAILABLE” Statements on website until 10/15 of the year in which the statement is first made available
Section 6055 and 6056 ReportingSection 6055 and 6056 Reporting When and How to File with IRS Paper returns due to IRS by February 28th Electronic returns due to IRS by March 31st Electronic returns required for entities filing more than 250 returns. Filing extension is permitted up to 30 days, if: Good cause Extension is applied for from IRS
Begin to Gather DataBegin to Gather Data Employer will need to gather data in 2015 for the 2016 reporting (unless an alternative method is available). Determine whether a controlled group exists that must be aggregated Determine whether benefits department or admin software will maintain data
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