Many employers offering health insurance coverage to their employees have been anticipating the final regulations setting forth the new employer reporting requirements under health care reform. These final regulations were issued last month.
Beginning in 2016, insurers and employers offering self-funded group health plans will be required to report certain information relating to coverage offered in 2015. This information must be reported to both the IRS as well as the covered individual. Additionally, large employers with 50 or more full-time equivalent employees will be required to report information about health coverage offered during the prior year to full-time employees. The regulations specify that the information will be reported on new IRS Forms 1094 and 1095, which have not yet been released, and not on Form W-2, as many had hoped.
As a preliminary matter, there are really two separate reporting requirements at play. One is required by Code Section 6055, “Provider Reporting” and another is required by Code Section 6056, “Employer Reporting.” The following is a summary of each of the reporting requirements pursuant to the final regulations:
Provider Reporting. Section 6055 requires most entities that provide minimum essential coverage to report annually to the IRS and to covered individuals certain information regarding that coverage. This requirement applies to insurers and employers sponsoring self-insured group health plans. The report must include the following information:
- the name of each covered person;
- the name and address of the responsible person (for example, an employee spouse or parent) who submitted the application for coverage;
- the taxpayer identification number (TIN) for each covered individual (a date of birth may be used instead but only in limited circumstances);
- the months for which each individual was covered (for this purpose, coverage during a month means a month during which, for at least one day, the individual was enrolled in coverage and entitled to benefits); and
- the name, address, and employer identification number (EIN) of the employer/insurer maintaining the plan.
The final rule does not require reporting of the specific dates of coverage (only months of coverage are relevant) and did away with the requirement that employers report their share of the premium. The report must go to the IRS and to each covered person.
The return under Section 6055 must be filed by February 28 of the year following the calendar year in which the minimum essential coverage was provided. Any reporting entity may file electronically, and must do so by March 31. Statements must be provided to covered persons by January 31 (similar to W-2s).
Employer Reporting. Section 6056 requires large employers (i.e., those with 50+ full-time employees or employee equivalents), to file a return with the IRS and to send a statement to each full-time employee containing certain information. Similar to Forms W-2, the regulations require a separate return for each employee which would be filed with the IRS accompanied by a single transmittal form.
The employer must report the following information:
- the name, address, and employer identification number of the plan sponsor;
- the name and telephone number of a contact person for the employer;
- the calendar reporting year;
- a certification as to whether the employer offered its full-time employees and their dependents the opportunity to enroll in minimum essential coverage and the months for which this coverage was offered;
- the number of full-time employees for each month in the calendar year;
- for each full-time employee, the months for which coverage was made available;
- for each full-time employee, the employee’s share of the lowest-cost monthly premium for self-only coverage providing minimum value, by calendar month; and
- the name, address, and TIN for each full-time employee and the months, if any, for which the employee was covered under the employer’s plan.
A copy of this report must also be provided to each full-time employee. Employee statements must be provided by January 31. Section 6056 returns must be filed with the IRS by February 28 or by March 31 if filed electronically. Employers filing 250 or more returns must file electronically.
Effective Date. Reporting entities will not be subject to penalties for failure to comply with the Section 6055 and 6056 reporting requirements for coverage in 2014, which would have resulted in reporting in 2015 and furnishing statements to covered individuals in 2015. Accordingly, a reporting entity will not be subject to penalties if it first reports beginning in 2016 for 2015 coverage, including the furnishing of statements to covered individuals in 2016 with respect to 2015 coverage.
The reporting requirements are complex; however, employers have some time to get ready. Employers should use 2014 to evaluate their information systems and ensure they have access to the information needed to complete the reports in 2016. This may require upgrades to information systems and/or requesting additional information from participant (e.g., information regarding dependents’ TINs).