This post is part of a series on 6055 & 6056 Reporting to supplement our webinar taking place on Tuesday, June 2 at 10:00. You can register for our free Webinar by clicking here.
The Affordable Care Act created new reporting requirements under Internal Revenue Code Section 6056. These new reporting rules require large employers subject to the ACA’s shared responsibility (pay or play) rules to report information on health coverage offered to full-time employees to the IRS. In addition, employees must also receive the same information.
In this blog post, AUI will help answer some questions about what information must be reported to comply with Section 6055.
Applicable Large Employer:
Before talking about reporting, let’s define an applicable large employer (ALE) because they are responsible for following Section 6056. An applicable large employer is one where there are fifty or more full time equivalent employees. More information about ALEs can be found here on the IRS website.
Full-time employees are those employed, on average, at least 30 hours of service per week. Whether an employee qualifies as a full-time employee is determined under either a look-back measurement or the monthly measurement method.
In addition, 6056 applies to all employers that are ALEs, regardless of whether or not coverage is offered to full time employees and their tax-exempt or government entity status. However, only ALEs with full-time employees are subject to the Section 6056 requirements. Thus, ALEs without any full-time employees are not subject to the Section 6056 reporting requirements.
The Section 6056 reporting uses forms 1094-C and 1095-C. Each applicable large employer (ALE) is required to file a single transmittal form (Form 1094-C) for all returns filed for a given calendar year; and a separate employee statement (1095-C) for each full time employee. In addition, an ALE that maintains a self-insured plan must also report under Code Section 6055 as a provider of minimum essential coverage.
Each ALE must file a Section 6056 transmittal form also know as a 1094-C with its Forms 1095-C. You can access a copy of the 2014 version of a 1094-C here. In addition, the IRS has provided a summary of questions and answers for Section 6056 reporting here.
Each ALE must file one Section 6056 employee statement also known as a 1095-C for each full-time employee. You can access a copy of the 2014 version of the 1095-C here.
Reporting Social Security Numbers:
Reporting entities are required to report the Social Security Number or other Taxpayer Identification Number (TIN) for each covered individual. If a reporting entity is unable to obtain an SSN after making a reasonable effort to do so, the covered individual’s date of birth (MM/DD/YYYY) may be entered in lieu of an SSN.
In order to show reasonable effort, the reporting entity must make:
- An initial solicitation at the time the relationship with the employee is established unless the reporting entity already has the payee’s TIN and uses that TIN for all relationships with the payee.
- If the reporting entity does not receive the TIN, the first annual solicitation is required by December 31 of the year in which the relationship with the payee begins.
- If after those attempts the TIN is not provided, a second solicitation is required by December 31 of the following year
If a TIN is still not provided, the reporting entity can stop soliciting for the TIN.
In an effort to protect personal information, employee statements can truncate the TIN or SSN of a covered individual on any statements furnished to individuals by showing only the last four digits of the TIN or SSN and replacing the first five digits with asterisks or Xs. Truncation is not allowed on forms filed with the IRS. In addition, the employer identification number (EIN) may not be truncated on the forms filed with the IRS.
If you have additional questions about Section 6056 reporting, please feel free to e-mail one of our insurance experts by clicking here. At AUI we work hard to keep our clients ahead of healthcare regulations.
Disclaimer: The intent of this analysis is to provide general information regarding the provisions of 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 questions regarding specific issues.