New ACA Reporting Requirements (Benefit Minute)
The Department of Treasury has issued final regulations implementing the insurer and employer reporting requirements under the Affordable Care Act, which will form the basis of the process for assessing penalties under both the individual mandate and the employer mandate and determining eligibility for premium tax credits. Set forth below is a summary of the general reporting requirements.
Reporting Minimum Essential Coverage (MEC)
Every entity that provides MEC must file an annual information return to the IRS and furnish a statement to covered individuals that gives information about the type and period of coverage (using new IRS Forms 1094-B and 1095-B). This includes health insurance issuers, plan sponsors of self-insured group health plans, the executive department or agency of a governmental unit that provides coverage under a government-sponsored program and any other entity that provides minimum essential coverage.
An issuer is not required to file a return or furnish a report for a Qualified Health Plan in the individual market enrolled through an Exchange. In addition, no reporting is required for MEC that is in addition to or supplements a primary plan that is MEC.
Information required to be reported includes:
• Name, address and EIN of the reporting entity;
• Name, address and tax identification number of primary person named on the application;
• Name and tax identification number of each individual covered under the policy, plan or program;
• Months for which coverage was provided for at least one day;
• Other information specified in forms, instructions or guidance;
• For employer-provided coverage, the name, address and EIN of the employer sponsoring the plan; and
• For SHOP coverage, the SHOP’s unique identifier.
The statement to covered individuals must also include the phone number for the reporting entity’s contact person.
Reporting Offer of MEC by Large Employers
Employers subject to the shared responsibility requirements (the employer mandate) must report whether an offer of coverage was made to full-time employees and whether such coverage was affordable and provided minimum value (using new IRS Forms 1094-C and 1095-C). This includes employers eligible for transition relief for all or a part of 2015. For control groups, each company (referred to as a large employer member) is separately responsible for compliance with the reporting requirement.
Information to be reported to the IRS includes the following (certain required information as applied to a particular full-time employee will be reported by an indicator code):
• Name, address and EIN of large employer member;
• If the large employer member is part of a control group, the name and EIN of each member of the control group;
• If a third party is reporting on behalf of a large employer member, the name, address and EIN of the third party;
• Name and phone number of contact person;
• Calendar year for which information is reported;
• Certification as to whether large employer member offered full-time employees (and their dependents) MEC;
• Months of the calendar year that MEC was available;
• Full-time employee’s share of the lowest cost self-only coverage that provided minimum value, by calendar month;
• Number of full-time employees by calendar month;
• Name, address and tax identification number of each full-time employee and the months, if any, during which the employee was covered;
• Indicator that coverage was not offered to a full-time employee during a permissible waiting period; and
• Other information specified in forms, instructions or guidance.
The large employer member must also furnish a statement to each full-time employee with the name, address and EIN of the large employer member as well as the above information specific to the full-time employee.
The large employer member may use a third party to assist in the preparation of the return and the employee statements; however, the employer remains responsible for compliance.
These reporting requirements first apply to coverage offered or provided during calendar year 2015. The statements to covered individuals or employees must be furnished by January 31 of the following calendar year (i.e. by January 31, 2016 for coverage provided in 2015). The statements may be sent via first class mail to the individual’s last known address or provided electronically with affirmative consent. Specific requirements apply.
Information returns must be filed with the IRS by last day of February of the following calendar year (or March 31 if filed electronically). Electronic filing is required if the total number of returns of the same type equals or exceeds 250. Each return to a covered individual (in the case of reporting of MEC) or an employee (in the case of reporting an offer of MEC) is counted as a separate return. The IRS is providing short-term penalty relief for entities that make a good faith effort to comply with the reporting requirements in the first year.