Employer reporting requirements and information on Forms 1095 and 1094
6055 Overview – Minimum Essential Coverage Reporting
Section 6055 requires health insurers and sponsors of self-insured plans to report on Minimum Essential Coverage (MEC) to the IRS annually. The reporting to both individuals and the IRS for 2015 is due in early 2016. It also requires insurers and self-insured plans to report to their MEC recipients, so the individuals can report that coverage when filing their federal taxes.
The 6055 reporting requirement has two goals:
- It helps individuals verify that they have MEC for purposes of satisfying the Individual Shared Responsibility requirement and
- It enables the IRS to crosscheck that information with insurers or self-insured plans.
Entities subject to 6055 reporting are health insurance issuers, sponsors of self-insured plans, government sponsored programs, such as Medicaid, and providers of other arrangements designated as MEC, such as high-risk pools.
The final rule states that self-insured employers are responsible for reporting this information to the IRS. Health insurers will provide reporting to the IRS for fully insured groups. If a self-funded employer needs information on covered members and their coverage dates for a calendar year to meet their part of their reporting obligation, a report of covered individuals may be available from the Third Party Administrator.
Information required to be reported to the IRS by health insurers and sponsors of self-insured plans who provide minimum essential coverage:
- The name, address and Employer Identification Number (EIN) of the reporting entity required to file the return.
- The name, address and Taxpayer Identification Number/Social Security Number (or date of birth if a TIN/SSN is not available and applicable requirements are met), of the responsible individual, except that reporting entities may but are not required to report the TIN/SSN of a responsible individual not enrolled in coverage.
- The name and TIN/SSN (or date of birth if a TIN/SSN is not available and applicable requirements are met), of each individual who is covered under the policy or program.
- Whether the coverage is a Qualified Health Plan (QHP) provided through the Small Business Health Options Program (SHOP) and the SHOP’s unique identifier. Information required to be reported to responsible individuals:
- The phone number for a person designated as the reporting entity’s contact person and policy number, if any.
- All information required to be shown on the Section 6055 return for the responsible individual and each covered individual listed on the return.
6056 Overview – Employer Reporting
Section 6056 reporting requires employers subject to Employer Shared Responsibility to report to the IRS information about the health coverage they provided to their employees.
The IRS will use this information to determine:
- if the employer has to pay any penalties for failing to offer coverage or
- the employer is failing to offer coverage that meets minimum value and is affordable.
The reporting to both individuals and the IRS for 2015 is due in early 2016. Even the smaller employer (50-99) will need to report the first year to certify they are exempt from a full report for the first year.
Information required to be furnished to the IRS:
- Employer’s name, the date, and the employer’s EIN and the calendar year
- The name and telephone number of employer’s contact person
- A certification as to whether the employer offered its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under your plan by calendar month
- The number of full-time employees for each calendar month during the calendar year, by calendar month
- For each full-time employee, the months during the calendar year for which minimum essential coverage under the plan was available
- For each full-time employee, the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that full-time employee under your plan, by calendar month
- Demographic information and social security number of each employee covered name, address and EIN of the applicable large employer member
Information reported to the IRS with the use of indicator codes will include:
- Information as to whether the coverage offered to full-time employees and their dependents under an employer-sponsored plan provides minimum value and whether the employee had the opportunity to enroll his or her spouse in the coverage.
- The total number of employees, by calendar month.
- Whether an employee’s effective date of coverage was affected by a permissible waiting period.
- Employers also have to provide statements to employees regarding their health coverage that mirrors the information reported to the IRS — primarily so employees can use this information to help determine if they are eligible for a premium tax credit
Employers also have to provide statements to employees regarding their health coverage that mirrors the information reported to the IRS — primarily so employees can use this information to help determine if they are eligible for a premium tax credit for health insurance through the Marketplace.
Additional information for Sponsors self-insured plans
- To reiterate, ASO employers are accountable to report for MEC reporting (regardless of size) and employer reporting (if they meet the 50+ full time employee threshold including equivalents). That is, they are accountable for 6055 and 6056 if it applies to them.
- A single, combined form for reporting is available for employers who self-insure that will handle reporting for both 6055 and 6056.
- The combined form will have two sections: the top half includes the information needed for section 6056 reporting, while the bottom half includes the information needed for section 6055.
DRAFT Reporting Forms
Form 1094-B: Transmittal of Health Coverage Information Returns to the IRS
Form 1095-B: Health Coverage Statement to the Primary Insured
Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return
Form 1095-C: Employer-Provided Health Insurance Offer and Coverage – Employee Statement
- Forms 1094-B and 1095-B will generally be used by entities reporting as health insurance issuers or carriers, sponsors of self-insured group health plans that are not subject to Employer Shared Responsibility, sponsors of multi-employer plans and providers of government-sponsored coverage under Section 6055.
- Forms 1094-C and 1095-C will be used by applicable large employers (ALEs) that are reporting under Code Section 6056.
- If you are a self-funded employer that is required to report under both Section 6055 and Section 6056, you can file under a combined reporting method, using Forms 1094-C and 1095-C.