IRS Forms Address Information Reporting under the ACA

Practical Law Legal Update 1-576-1145 (Approx. 6 pages)

IRS Forms Address Information Reporting under the ACA

by Practical Law Employee Benefits & Executive Compensation

Information Reporting under the ACA

Beginning in 2016 (for information relating to 2015), the information reporting rules require employers and insurers to file information returns with the government and to provide corresponding statements to individuals.

Section 6055 Reporting

Under Section 6055, employers that self-insure, insurers and others that provide individuals with minimum essential coverage (MEC) must file annual information returns and a transmittal form to the IRS (26 U.S.C. § 6055) (see Practice Note, Information Reporting for Employers That Self-Insure and Insurers (Section 6055)). Section 6055 information reporting is intended to establish whether an individual has MEC, and is therefore not liable for an individual mandate payment (26 U.S.C. § 5000A) (see Practice Note, The Affordable Care Act (ACA) Overview: Individual Mandate).

The IRS forms used for Section 6055 reporting will vary depending on whether the reporting entity is an employer or an insurer, as follows:

Large employers that sponsor self-insured plans will report on IRS Forms 1095-C and 1094-C (transmittal form), completing both sections of Form 1095-C, under a combined reporting approach, to report the information required under Sections 6055 and 6056 (see Forms 1095-C and 1094-C).
Entities that are not reporting as large employers (for example, health insurers and sponsors of multiemployer plans) will report on IRS Forms 1095-B and 1094-B (transmittal form) (see Forms 1095-B and 1094-B).

Some employers that sponsor self-insured group health plans will be required to report under both Sections 6055 and 6056. Under the combined reporting approach, employers that sponsor:

Self-insured plans will file IRS Form 1095-C, completing both sections to report information required under Sections 6055 and 6056.
Insured coverage will complete only the section of Form 1095-C that reports information required under Section 6056.

Entities may file on a substitute form if the form:

Includes the information required on the IRS forms designated for Section 6055 reporting.
Complies with general IRS standards for substitute forms (see IRS Rev. Proc. 2012-38 and 26 C.F.R. § 601.601(d)(2)).

Section 6056 Reporting

Section 6056 requires large employers to file annual information returns with the IRS to report the health coverage (if any) they offer to full-time employees, for purposes of administering the ACA's employer mandate (26 U.S.C. § 4980H) (see Employer Mandate Toolkit). Section 6056 also requires large employers to provide an individual statement to each employee so that the employee can determine whether, for each month of the year being reported, the employee is eligible for a premium tax credit under the ACA.

Section 6056 information returns will be reported to the IRS on IRS Forms 1095-C and 1094-C (transmittal form) (see Forms 1095-C and 1094-C). A separate return (Form 1095-C) must be provided to each full-time employee.

Large employers will use a single combined form for reporting the information required under both Sections 6056 and 6055.

Forms 1095-C and 1094-C

As issued in draft form, Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) includes:

In Part I, spaces for general employee and large employer information (for example, name, address, social security number (SSN) and employer identification number (EIN)).
In Part II, spaces describing employee offer of coverage, for example:
- which months during the year an offer of coverage was made and corresponding indicator codes (for example, one of the codes reflects that MEC providing minimum value was offered only to the employee (as opposed to being offered to the employee, a spouse or dependents));
- the employee's share of the coverage premium; and
- any applicable employer mandate safe harbor codes and corresponding indicator codes (for example, to reflect employees who are in a non assessment period) (see Practice Note, Employer Mandate under the ACA: Overview: Non Assessment Periods).
In Part III, regarding employers that provide self-insured coverage, information about each covered individual (for example, name, SSN or date or birth and months of coverage).

The draft version of Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) also includes three parts. In Part I, the filer reports general employer information (for example, name, address, EIN and contact information). Also, a line item in Part I requests the total number of Forms 1095-C being submitted with the transmittal letter.

Part II of Form 1094-C requires filers to indicate:

The total number of Forms 1095-C filed by (or on behalf of) a large employer.
Whether the employer is part of an aggregated group.
Whether the employer is eligible for certain simplified Section 6056 reporting options or transition relief regarding the employer mandate (see Practice Notes, Information Reporting of Health Insurance Coverage by Large Employers (Section 6056): Alternative Reporting Methods and Employer Mandate Transition Relief under the ACA).

Part III of Form 1094-C requires reporting, on a month-by-month basis, of MEC offers, the employer's number of full-time employees and total employees, whether the employer is part of an aggregated group and an indicator for employer mandate transition relief (reflected using one of two indicator codes). In Part IV, the employer must indicate the names and EINs of other aggregated group members.

Forms 1095-B and 1094-B

As issued in draft form, Form 1095-B (Health Coverage) requires insurers and other filers to report general information about policy holders (referred to as "responsible individuals"), employer-sponsored coverage, the insurer/coverage provider and other covered individuals (for example, whether individuals were covered for all 12 months of a year or only certain months during the year).

The draft version of 1094-B (Transmittal of Health Coverage Information Returns) requires reporting of:

General information about a filer.
The total number of Forms 1095-B submitted with Form 1095-C transmittal.

Practical Impact

The draft forms give employers and insurers a first look at the specific information they will need to collect to satisfy Sections 6055 and 6056 reporting and disclosure obligations. As a result, the forms (though they cannot be filed with the government) will be instructive for filers as they develop their internal systems and procedures for the information reporting. The IRS is accepting comments regarding the draft forms and yet-to-be-issued instructions. Although each of the forms will eventually have its own dedicated IRS website with relevant information, those sites are not yet live.

IRS Forms Address Information Reporting under the ACA | Practical Law