On March 5, 2014, the Internal Revenue Service (IRS) released final regulations on the reporting requirements under the Affordable Care Act (ACA), which are designed to enforce the individual and employer mandates. Beginning 2016, for the prior calendar year, employers who are subject to the Employer Mandate or sponsor self-funded group health plans are required to report information to the IRS and provide copies to each “responsible individual” under sections 6055 and 6056 of the tax code. The final regulations allow for combined reporting using a single form for employers that self -insure and simplified reporting alternatives for employers that offer affordable coverage to substantially all full-time employees.
Effective date: IRS Forms 1094 and 1095 (not yet released) are due no later than March 1, 2016, (because February 28, 2016 is a Sunday) or March 31, 2016, if filing electronically. The first statements to employees are due no later than February 1, 2016 (because January 31, 2016 is a Sunday). Electronic delivery is permissible with the affirmative consent of the employee.
Subject to the reporting requirements: The reporting is divided into two segments:
· Minimum Essential Coverage (MEC) reporting applies to health insurance carriers and sponsors of self-insured health plans.
· Applicable Large Employer (ALE) reporting applies to employers with at least 50 full-time equivalent employees
Employer impact: Employers subject to the reporting requirements need to begin collecting the information required on the information returns and employee statements. The deadline for form submission applies to both calendar-year and fiscal-year health plans; therefore non-calendar-year plans must submit information from portions of two plan years.
Information to be reported will include:
- Number of full- time employees by calendar month
- Certification that employer offered the opportunity to enroll in minimum essential coverage, MEC, to its full-time employees and dependents by calendar month
- Each full- time employee’s share of single premium toward the lowest cost option, that provides minimum value, by calendar month
- Months for which each individual was enrolled and entitled to receive benefits
- Employee (responsible individual) name, address, and TIN
- Covered individuals name, address, and TIN