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ACA Reporting of Healthcare Coverage

Section 6055 and 6056

The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056, which require certain employers to provide information to the Internal Revenue Service (IRS) about the health plan coverage they offer (or do not offer) to their employees.

6056 - Applicable Large Employer Health Coverage Reporting (Code § 6056)

Requires applicable large employers to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offered. For more information visit: http://www.irs.gov/Affordable-Care-Act/Employers/Questions-and-Answers-o...

6055 - Provider Reporting of Health Coverage (Code § 6055)

Provides that every provider of minimum essential coverage will report coverage information by filing an information return with the IRS and furnishing a statement to individuals. For more information visit: http://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-on-Informat...

More information on these sections

  • Reporting Overview
  • Reporting Deadlines
  • Electronic Forms
  • Required Forms

 

Updates

There have been a number of updates regarding the ACA's Section 6055 and 6056 reporting requirements. The major developments are outlined below:

Sept. 17, 2015: The IRS released final 2015 versions of Forms 1094-B, 1095-B, 1094-C and 1095-C, along with related instructions, that employers will use to report under Sections 6055 and 6056. The final instructions include extensions of time to file and a process to obtain an electronic reporting waiver, as well as important clarifications on the reporting of HRA coverage.

Aug. 18, 2015: The IRS finalized Publication 5165, Guide for Electronically Filing ACA Information Returns for Software Developers and Transmitters. Any employer that files at least 250 Section 6055 or 6056 returns must file electronically (or obtain a waiver). However, these employers can file the first 250 returns on paper, if they so choose.

Reporting entities that file fewer than 250 returns during a calendar year may still file via paper. Electronic filing will be done through the ACA Information Returns (AIR) program, which is slated to become available on Oct. 22, 2015.

June 29, 2015: The Trade Preferences Extension Act of 2015 was signed into law, which increased penalties for employers that fail to comply with Section 6055 and 6056 reporting. The adjusted penalty amounts for 2016 are outlined below:

  • The general penalty amount increased from $100 to $250 for each return, up to an annual maximum of $3 million per calendar year (previously $1.5 million). The annual maximum for small employers (those with up to $5 million in annual gross receipts) rose from $500,000 to $1 million.
  • Penalties for violations corrected within 30 days increased from $30 to $50, up to an annual maximum of $500,000 per calendar year (up from $250,000). The annual maximum for small employers increased from $75,000 to $175,000.
  • Penalties for violations corrected by Aug. 1 increased from $60 to $100, up to an annual maximum of $1.5 million per calendar year (previously $500,000). The annual maximum for small employers increased from $200,000 to $500,000.
  • Minimum penalties for violations due to intentional disregard rose from $250 to $500 for each return, with no annual maximum.

Temporary relief from penalties may be available if employers can show they made good faith efforts to comply with the reporting requirements. Employers should review their information returns and individual statements to promote reporting accuracy.

 


 

 Reporting Overview

 
Section 6055
Section 6056
Applies to:

Providers of minimum essential coverage (MEC)

Applicable large employers (ALEs)
Requires reporting entities to:
  • File information with the IRS Provide statements to covered individuals
  • Provide statements to covered individuals
  • File information with the IRS
  • Provide statements to full-time employees
Purpose is to help:
  • IRS administer the individual mandate and determine eligibility for subsidies Individuals show compliance with the individual mandate
IRS administer the employer shared responsibility rules

Self-funded plan sponsors that are ALEs must report under both sections, but will use a combined reporting method


 

Reporting Deadlines

Rules effective for 2015 coverage
  • 2015 coverage information will be reported in
  • 2016 Employers must collect information during 2015
IRS Returns
Individual Statements
  • Annual Deadline: Feb. 28 (March 31, if filed electronically)
  • For 2015: Feb. 29, 2016 (March 31, if filed electronically)
  • Annual Deadline: Jan. 31
  • For 2015: Feb. 1, 2016
  • May be furnished electronically if requirements are met

 


 

Electronic Reporting

IRS Returns

  • Electronic filing is required for reporting entities that file 250 or more individual statements per calendar year
  • Applies separately to each type of individual return (Forms 1095-B or 1095-C)
  • Electronic filing is OPTIONAL for other reporting entities

Individual Statements

  • General rule: provide statements on paper by mail to last known permanent address (or temporary address)
  • Statements MAY be furnished electronically if consent requirements are met

 


 

Required Forms

ACA Reporting of Healthcare Coverage Required Forms

 

Speak With A Compliance Expert

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Reporting of Health Coverage

  • Draft Forms for 2016 ACA Reporting Released
  • IRS to Accept ACA Filings After June 30 Deadline
  • ACA Reporting Deadlines Delayed
  • 2015 Testing Now Open for Electronic Reporting under Sections 6055 and 6056
  • Explaining Form 1095
  • IRS Clarifies that Separate Section 6055 Reporting Not Required for Most HRAs
  • Provider Reporting of Health Coverage—Code Section 6055
  • Employer Reporting of Health Coverage—Code Section 6056
  • Guidelines Finalized for Electronic Reporting under Sections 6055 and 6056
  • Penalties Increased for Section 6055 and Section 6056 Reporting Violations
  • IRS Issues New Q&As on Section 6056 Reporting
  • IRS Releases 2015 Draft Forms for Employer Reporting of Health Coverage

2014 Articles

  • IRS Releases ACA Employer Reporting Instructions
  • IRS Issues Final ACA Employer Reporting Rules

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