The IRS has released updated Q&As to explain the information reporting requirements under the Affordable Care Act (“ACA”).
Background. The ACA added Section 6055 to the Internal Revenue Code, which requires every provider of minimum essential coverage to report certain information by filing a report with the IRS and furnishing a statement to covered individuals. The IRS uses this information to enforce the ACA’s individual shared responsibility provisions.
Updated Guidance. Highlights from the Q&As are as follows:
Fully-insured plans. Employers that sponsor insured health plans do not report as providers of health coverage under Section 6055. Rather, the insurer is responsible for reporting the coverage.
Self-insured plans.
- For a self-insured group health plan maintained by a single employer, the plan sponsor is the employer.
- For a plan maintained by more than one employer but is not a multiemployer plan, each participating employer is a plan sponsor.
- For a multiemployer plan, the plan sponsor is the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.
- For a plan maintained solely by an employee organization, the plan sponsor is the employee organization.
- For any plan for which a plan sponsor is not identified above, the plan sponsor is the person designated by plan terms or, if no person is designated, each entity that maintains the plan.
Controlled groups. Plan sponsors in a controlled group may report under Section 6055 as separate entities or may have one entity report for the entire controlled group.
Reporting of supplemental benefits. No reporting is required for supplemental benefits (e.g., excepted benefits such as coverage at an on-site clinic) if such benefits are not minimum essential coverage.
Information required to be reported to IRS. The information that employers must report to the IRS is as follows:
- The name, address, and EIN of the employer;
- The covered individual’s name, address, and SSN (or date of birth if a SSN is not available);
- The name and SSN (or date of birth if a SSN is not available) of each individual covered under the policy or program and the months for which the individual was enrolled in coverage and entitled to receive benefits.
Information required to be reported to individuals. In addition to the information reported to the IRS, employers must provide a telephone number for questions about information in the statement.
When to report for 2016. IRS has extended the due date for furnishing 2016 statements (i.e., Forms 1095-B) to individuals from January 31, 2017, until March 2, 2017. It has not extended the due date for filing the 2016 Form 1094-B with the IRS.
Although IRS has not extended the due date for filing Form 1094-B, the extension explained above does not affect the normal provisions regarding automatic extensions of time for filing information returns, which can be obtained by submitting a Form 8809, “Application for Extension of Time To File Information Returns.” Also, it does not affect the provisions regarding additional extensions of time to file.
Penalties for 2016 coverage reporting. The penalty under Code Section 6721 (i.e., $250 for each return to which the failure applies) may apply to an employer that fails to file timely information returns, fails to include all the required information, or includes incorrect information on the return. The penalty under Code Section 6722 (i.e., $250 for each statement to which the failure applies) may apply to an employer that fails to furnish timely the statement, fails to include all the required information, or includes incorrect information on the statement. The IRS may waive such penalties where a coverage provider can demonstrate that it used good faith in attempting to comply with the reporting requirements or that there is reasonable cause for the failure.
The IRS Q&As are available at: https://www.irs.gov/affordable-care-act/questions-and-answers-on-information-reporting-by-health-coverage-providers-section-6055