With the passage of the Affordable Care Act (ACA), sections 6055 and 6056 have been added to the Internal Revenue Code with reporting requirements for employers subject to the ACA’s shared responsibility or “play or pay” mandate. Under the new reporting rules, certain employers must submit information to the IRS regarding health plan coverage offered - or not offered - to employees throughout the year. This information will be used by the IRS to administer and enforce the ACA’s large employer shared responsibility penalty and the individual mandate.
*UPDATE: On December 28, 2015, the IRS released IRS Notice 2016-4, which delays Section 6055 and 6056 reporting for the 2015 reporting year. Click here to view the complete notice and the updated deadlines.
Code § 6055
Section 6055 was added to administer the ACA’s individual mandate. It provides individuals proof of compliance with the individual shared responsibility provision and the IRS with information to enforce the individual mandate.
Who is required to report?
Every provider offering minimum essential coverage (MEC) to an individual must file an annual return with the IRS and provide individual statements to those with coverage. This includes health insurance issuers, self-insured health plan sponsors, and government sponsored programs.
For employers with fully-insured group health plans, the insurance carrier assumes the reporting requirements on the employer’s behalf. However, employers with self-insured plans remain responsible for the reporting, even if they’re not subject to the large employer “pay or play” mandate. Most self-funded plan sponsors will fulfill 6055 reporting by completing on a combined basis with section 6056 reporting.
What are you required to report?
6055 reporting requires information on individuals provided with coverage throughout the calendar year. This includes information on the provider of MEC - self-insured employer or insurer - and information on each covered individual and their dependents - names, addresses, SSNs, dates of coverage under the policy, etc.
How do I fulfill the reporting requirements?
The IRS has furnished two forms that need to be completed for a successful filing:
- 1094-B is the transmittal form to be filed to the IRS. It requires information identifying the entity submitting forms 1094-B and 1095-B to the IRS.
- 1095-B is the employee statement to be furnished to every covered individual. It requires information on the responsible individual (policy holder), provider of MEC, and all covered individuals - Name, SSN, and months of coverage.
When am I required to report?
Code § 6055 reporting is required on a calendar year basis, beginning in 2016 for the 2015 calendar year. Form 1095-B must be provided to covered individuals on the first business day on or after January 31st of the following calendar year. For 2016, the date is February 1st*.
Forms 1094-B and 1095-B must be filed with the IRS by the 1st business day on or following February 28th of the following calendar year. In 2016, the date is February 29th or March 31st if filed electronically*.
Code § 6056
Section 6056 was added to help the IRS administer the ACA’s employer shared responsibility penalty by verifying the affordability and MEC of employer-sponsored coverage. It also helps determine if full-time employees and their dependents eligible for a premium credit.
Who is required to report?
Section 6056 reporting is only applicable to large employers with 50 or more full-time and full-time equivalent employees. Mid-size employers with 50 to 99 full-time employees are still required to report under section 6056 for 2015 though they are not subject to the “pay or play” penalty until the 2016 calendar year. A large employer with a fully-insured health plan will only need to complete 6056 reporting as the insurer will complete the 6055 reporting. Large employers with self-funded plans are subject to both 6055 and 6056 reporting but generally can complete on a combined basis.
What are you required to report?
6056 reporting requires information about the applicable large employer (ALE) reporting to the IRS, total number of employees and full-time employees each month, and whether MEC was offered each month. 6056 also requires information on employees offered coverage including personal information (name, name address, SSN), months in which MEC was offered, employee’s share of lowest self-only monthly premium, reason for enrolling or not enrolling in health plan, and information on all covered individuals & dependents (name, SSN, months of coverage under the policy, etc.).
How do I fulfill the reporting requirements?
The IRS has furnished two forms that need to be completed for a successful filing:
- 1094-C is the transmittal form to be filed to the IRS. It requires information identifying the ALE submitting forms 1094-C and 1095-C to the IRS and whether qualified coverage was offered to their full-time employees.
- 1095-C is the employee statement to be furnished to every full-time employee. It requires employer/employee identification and information indicating whether coverage was offered and accepted by employees and their dependents for each month of the year.
When are you required to report?
Code § 6056 reporting is required on a calendar year basis, beginning in 2016 for the 2015 calendar year. Form 1095-C must be provided to full-time employees on or before January 31st of the following calendar year. In 2016, the date is February 1, 2016 since January 31, 2016 is a Sunday*.
Forms 1094-B and 1095-B must be filed with the IRS by the 1st business day on or following February 28th of the following calendar year. For 2016, the date is February 29th or March 31 if filed electronically*. Regulations require that employers with 250 or more employees file electronically.
Next Steps?
- Don’t wait. With reporting deadlines in early 2016 for the 2015 calendar year*, there is no time to lose. IRS can levy fines per late or unfiled form up to $1.5 million, so act now to assemble what you need to meet the reporting deadlines.
- Contact your payroll provider – Most payroll vendors have modules and add-ons that can help you fulfill your IRS reporting obligations for an additional charge. Contact them right away as they will need time for a smooth and successful implementation.
Forms & Instructions
Below are links to the forms and instructions to completing the ACA reporting required by the 6055 and 6056 tax code sections. Though these are 2014 forms, the information fields should remain the same in 2015.
Code § 6055
Instructions to complete Forms 1094-B and 1095-B
Code § 6056
Instructions to complete Forms 1094-C and 1095-C
*UPDATE: On December 28, 2015, the IRS released IRS Notice 2016-4, which delays Section 6055 and 6056 reporting for the 2015 reporting year. Click here to view the complete notice and the updated deadlines.
