IRS Issues New ACA Reporting Requirements

On March 5, the IRS issued two important reporting requirements for employers under the Affordable Care Act: Code Section 6055 and Code Section 6056. Both requirements are effective for health coverage provided on or after Jan. 1, 2015.
  • Code Section 6055 reporting is required for employers with more than 50 full-time equivalent employees with fully-insured or self-insured plans. It discloses each individual to whom minimal essential coverage has been provided.
  • Code Section 6056 reporting is also required from these large employers. It requires the employers to disclose to full-time employees the ACA’s shared responsibility provision listing the health care coverage options.
A statement is required to be furnished to each participant under both of the code section requirements.

The first informational returns are due to the IRS in 2016; however, the return form has yet to be released by the IRS. Information about the entity providing coverage that needs to be reported includes contact information, which individuals are enrolled and what months they are enrolled for, descriptions of the types of coverage offered, and the costs of the lowest coverage or self-only coverage. Combined reporting is permitted for employers who offer self-insured plans on both Section 6055 and 6056 returns. For employers with fully-insured plans, the insurance carrier will report Section 6055 separately. These simplified reporting options will be available to employers who offer qualifying coverage to at least 95 percent of their full-time employees and their families. It eliminates the monthly reporting that was previously required under the ACA.

Separately, on March 5, the Department of Health and Human Services stated it would allow individuals who are enrolled in coverage but don’t meet basic ACA requirements to maintain the plans for an additional two years. This will allow such plans to stay in effect until the end of 2016.