The Internal Revenue Service recently released final versions of forms and related instructions that employers may use to report under Sections 6055 and 6056 for 2014. These forms are not required to be filed for 2014, but reporting entities may voluntarily file them in 2015 for 2014 coverage.
The forms for 2015 must be filed by February 28 (or March 31, if filed electronically). Form 1095-B or 1095-C must be provided to applicable full-time employees by January 31.
Section 6055 Reporting
Under Section 6055, every entity that provides minimum essential coverage (MEC) to an individual during a calendar year must file Forms 1094-B and 1095-B, including:
- Health insurance issuers or carriers;
- Self-insured health plan sponsors;
- Government agencies that administer government-sponsored health insurance programs; and
- Any other entity that provides MEC.
For small employers purchasing a fully insured product, the sponsoring insurance carrier is responsible for this particular filing.
Self-insured plan sponsors that are also applicable large employers (ALE) subject to the employer shared responsibility rules will report information about the coverage in Part III of Form 1095-C, instead of on Form 1095-B.
Applicable Large Employers
According to the IRS, applicable large employers that are subject to the employer shared responsibility provisions under section 4980H are required to report under Section 6056. An ALE is defined as an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year.
A full-time employee generally includes any employee who was employed on average at least 30 hours of service per week and any full-time equivalents. For example, 40 full-time employees employed 30 or more hours per week on average plus 20 employees employed 15 hours per week on average are equivalent to 50 full-time employees.
Employers that are not subject to the employer shared responsibility provisions of Section 4980H are not required to report under Section 6056. Consequently, employers that employed fewer than 50 full-time employees (including full-time equivalents) during the prior year are not subject to the reporting requirements. The IRS notes that any employer that sponsors a self-insured health plan is required to report under section 6055, even if the employer has fewer than 50 full-time employees.
Questions and answers on reporting can be found on the IRS website for both Section 6055 and Section 6056. Additional information can also be found in the IRS’ publication, “Affordable Care Act: Reporting Requirements for Applicable Large Employers,” by clicking here.
Section 6056 Reporting
All ALEs must file Form 1094-C and Form 1095-C for each full-time employee. These forms help the IRS determine whether an ALE owes penalties under the employer shared responsibility rules (“pay or play” rules), as well as whether an employee is eligible for premium tax credits.
Form 1095-C will generally be used by ALEs to satisfy both the Section 6055 and 6056 reporting requirements, as applicable.
- An ALE that sponsors a self-insured plan will complete all sections of Form 1095-C to report the information required under both Sections 6055 and 6056. Therefore, these ALEs will be able to use a single form to report information regarding whether an employee was covered.
- An ALE that provides insured coverage will also report on Form 1095-C, but will complete only the sections of Form 1095-C related to Section 6056.
Jeffrey R. Ungvary President