Is this a Football Game or are we talking about Health Insurance?
It feels like a quarterback calling out a play, 6056, 1095, 4980H – HIKE!, but employers are reporting which employees had health insurance and for how many months during the year.
The Affordable Care Act (ACA) created reporting requirements in Internal Revenue Code (Code) Section 6056. Under these rules, applicable large employers Applicable Large Employer (ALEs) subject to the employer shared responsibility rules must provide information to the Internal Revenue Service (IRS) about the coverage they offered to their full-time employees. Related statements must also be provided to each of the ALE’s full-time employees. Want to know what an ALE or Full Time Equivalent (FTE) is? Here’s a link to the IRS website.
Reporting was first required in early 2016 for calendar year 2015. For the 2016 calendar year:
• Returns must be filed no later than Feb. 28, 2017, or March 31, 2017, if filed electronically; and
• Individual statements must be furnished by March 2, 2017.
This additional reporting is intended to promote transparency in health plan coverage and costs. It will also provide the government with information to administer the employer shared responsibility rules, which imposes penalties on ALEs that do not offer affordable, minimum value coverage to their full-time employees (and dependents).
Some employers thought that they could skirt reporting and even, heck, the whole offering of coverage thing by splitting up their companies under separate tax ID numbers, but the government already thought of that. If you own a majority share in multiple companies, they are considered an Aggregated ALE group and if the employee FTE base is over 50 for the prior year, you’re stuck.
But now you say “I’m a self-insured employer” why do I have to fill this stuff out. Well, ALEs that sponsor self-insured group health plans also are required to report information about employees (including former employees) and their spouse, dependents and other family members who enroll in the self-insured coverage; these information reporting requirements for providers of minimum essential coverage (MEC) apply under Section 6055. ALEs that sponsor self-insured group health plans generally provide the information required under both Sections 6055 and 6056 on Form 1094-C and Form 1095-C. The IRS and individuals will use the information provided under Section 6055 to verify compliance with the ACA’s individual mandate.
- How the heck am I going to get this done you ask? Well, you could have your payroll vendor, or your employee benefits consultant provide you the tools. For additional details, see the instructions for Forms 1094-C and 1095-C and the Q&As about Information Reporting by Employers on Forms 1094-C and 1095-C.
Rapport Benefits administers these reports for our ALE’s. If your current broker doesn’t, you should give us a call. By Jan Fernandez