This post is the first in our series on IRS Section 6055 & 6056 Reporting. We will be hosting a free webinar on this topic on Tuesday, June 2 at 10:00 a.m. You can register for the webinar by clicking here.
The Affordable Care Act created new reporting requirements under the Internal Revenue Code Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees. This additional reporting was created to promote transparency between health plan coverage and costs. Unfortunately, the side effect of this transparency is a lot of questions and headaches for employers.
Here are a few basic elements to help one understand the reporting requirements:
Who Reports: Small Employers
If a company less than fifty full time or full-time equivalent employees and a fully insured health plan reporting will be done by the carrier under code 6055. Employees will receive a 1095B from the carrier and the insurance carrier should file all of the appropriate forms with the IRS on behalf of the employer.
If a company has less than fifty full-time or full time equivalent employees and a self-insured health plan, the company is responsible for reporting information to the IRS under code 6055. This means the employer is responsible for submitting the 1094B for the company and the 1095B to all employees.
Who Reports: Large Employers
Large employers are those who have fifty or more full-time and/or full-time equivalent employees. All large employers must do some form of 6055 and 6056 reporting.
If a company is fully insured then the carrier and the employer are responsible for reporting, the carrier reports on Section 6055 and files 1094B & 1095B while the employer reports on Section 6056 and files 1094C & 1095C.
If a company is self insured the employer is responsible for all Section 6055 and Section 6056 reporting, the employer will submit 1094C and 1095C. In addition, if the employer covers non-employees (e.g. COBRA, directors, retirees, qualified beneficiaries) all non employees must also be reported on following Section 6055 resulting in 1094B.
All 1095’s for employees and covered individuals must be mailed to the last known address no later than January 31 of the following year except when it falls on a Sunday. So 2015 1095’s must be mailed by February 1, 2016.
Forms must be mailed to the IRS by February 29, 2016. If filing electronically a company has until March 31, 2016. If an employer has more than 250 forms they must be filed electronically.
The final rules do not allow for an alternate filing date for employers with non-calendar year plans. Although employers may collect information on a plan year basis, employees will need to receive their individual statements early in the year in order to have the information to file their tax returns.
A large group employer is required to report information about the health coverage offered to its full-time employees and their dependents. This requirement applies to all large employers whether they offer benefits or not. In filing the return with the IRS the employer must furnish a statement reporting whether an offer of health coverage was or was not made to the employee and if an offer was made what was contained in the offer.
Under the reporting guidelines an employer makes an offer of coverage to an employee if it provides the employee an effective opportunity to enroll in health coverage (or to decline that coverage) at least once for each plan year.
AUI will continue to cover more about 6055 and 6056 reporting in the days and weeks to come. Should you have any questions, you can always contact us and we are happy to help.
Disclaimer: The intent of our blog series is to provide general information regarding the provisions of the current healthcare reform legislation and regulation. It does not necessarily fully address all your organization’s specific issues. It should not be construed as, nor is it intended to provide legal advice. Your organization’s general counsel or an attorney who specializes in this practice area should address more complex questions regarding specific issues.