Skip to main content
A Better Partnership

Publications

Feb 2014
07
February 07, 2014

Affordable Care Act Requires More Reports


The federal Affordable Care Act includes a number of new reporting requirements that will go into effect in the 2015 calendar year, and later in some cases. The key requirements are the reporting of Minimum Essential Coverage and Employer-Sponsored Coverage.  Although reporting begins for the 2015 calendar year, the reports won’t be due until early 2016. Payroll systems should be modified in 2014 to capture the information required in 2015.  For the other reporting requirements described below, we are still waiting for initial guidance as to what and when to report.

Information Reporting on Minimum Essential Coverage:  Under new Tax Code Section 6055, any employer that provides minimum essential coverage will have to file reports with the IRS and provide information to individuals.  The data elements have not yet been finalized, but under the proposed regulations, the IRS would require that the report to the IRS include the following:
 
  • The name, address and EIN of the employer, and whether the coverage is through the SHOP Exchange;
  • The name, address and tax identification number of each employee insured under the medical plan (but may use date of birth instead of TIN when a TIN is not reasonably available);
  • The name and tax identification number of all other individuals covered by the medical plan (but may use date of birth when a TIN is not reasonably available);
  • The months during which each individual was covered for at least day by the medical plan.
  • Whether the coverage is a qualified health plan provided through an exchange.
  • Any additional data elements specified in the forms, instructions or other guidance to be issued by the IRS.

A separate report must be filed for each individual who is covered under the plan.  Under the proposed regulations, aggregation rules won’t apply, so each corporate affiliate with U.S. operations must report for its own employees (though one affiliate could assist by filing returns and furnishing statements on behalf of other affiliates). 

The reporting is done using Form 1095-B, which doesn’t exist yet, or a substitute form that complies with IRS requirements. Those forms must be filed with the IRS by Feb. 28 of the year that follows the calendar year of coverage described in the form. 

For employers required to file at least 250 returns, the proposed regulations require that the reports be filed electronically. The deadline for filing electronic reports is March 31 of the year after the coverage was provided.  

Reports provided to employees must include the information filed with the IRS, plus a contact phone number for the corporate affiliate required to file the report.  The proposed rules indicate that an employer can provide a copy of the form provided to the IRS or a substitute statement that includes all of the required data elements and complies with IRS requirements.  The employee statement can include truncated forms of TINs.  Individual statements must be furnished by Jan. 31 of the year following the calendar year of coverage described in the form.  Thus, information statements to employees for 2015 will have to be sent by January 31, 2016.  The proposed regulations do allow for electronic distribution of the statements — but only if the individual has provided affirmative consent that has not been withdrawn.

Information Reporting of Employer-Sponsored Coverage:  Under new Tax Code Section 6056, an employer is required to report to the IRS and to employees whether the employer offers its full-time employees (and the employees’ dependents) the opportunity to enroll in minimum essential coverage.  While not yet finalized, the proposed regulations would require reporting of the following information to the IRS:

  • The name, address and EIN of the employer;
  • The name and telephone number of the employer’s contact person;
  • The calendar year for which the report is being submitted;
  • A certification as whether the employer offered its full-time employees and their dependents the opportunity to enroll in minimum essential coverage;
  • The months during which medical plan coverage was available;
  • Each full-time employee’s share of the lowest cost monthly premium for self-only coverage offered under the medical plan;
  • The number of full-time employees for each month during the calendar year;
  • The name, address and tax identification number of each full-time employee during the calendar year; and the months, if any, during which the employee was covered under the plan;
  • The name and tax identification number of all other individuals covered by the medical plan (but may use date of birth when a TIN is not reasonably available);
  • Any additional data elements specified in the forms, instructions or other guidance to be issued by the IRS.

In the preamble to the proposed regulations, the IRS indicated that it would likely ask for the following information, possibly through the use of indicator codes:
 
  • Whether the coverage offer meets minimum value requirements;
  • Whether the employee had the opportunity to enroll his or her spouse;
  • Total number of employees, by calendar month;
  • Whether an employee’s coverage was affected by a waiting period;
  • Whether the employer was not conducting business during any month (reported by month);
  • Whether the employer expects to still be a large employer in the following year;
  • Whether the employer is part of a controlled group of employers that are considered an aggregated group—and if so, the name and EIN of each employer member of the aggregated group of employers;
  • If the employer contributes to a multiemployer plan, whether a full-time employee is treated as eligible to participate in a multiemployer plan due to the employer’s contributions to the multi-employer plan.

The preamble also indicates that companies likely will have to report the following information to the IRS and to the individual through the use of codes:
 
  • Who was offered minimum value coverage:
    • Employee only;
    • Employee and employee’s dependents only;
    • Employee and employee’s spouse only; or
    • Employee, employee’s spouse and dependents
  • Coverage was not offered to the employee and:
    • The employee was in a waiting period permitted under the ACA;
    • The employee was not a full-time employee;
    • The employee was not employed by the entity during that month; or
    • No other code or exception applies
  • Coverage was offered to the employee for the month although the employee was not a full-time employee during that month.
  • The entity met one of the affordability safe harbors with respect to the employee.

The reporting is to be done using Forms 1094-C and 1095-C (which don’t yet exist).  As with the reporting under Tax Code Section 6055, each corporate affiliate will have to report for its own employees.  Reporting is due by Feb. 28 of the year that follows the year to which the information relates – except that employers who have to file more than 250 returns for a year must file electronically and electronic filers will have until March 31 to file the return. 

The proposed regulations require that the employer provide to each employee the same information that will reported to the IRS as it relates to that particular employee plus the name, address and EIN of the employer.  The statement to the employee can be furnished either using Form 1095-C, another form designated by the IRS, or a substitute statement that complies with IRS form and content requirements.  The employer may use a truncated version of the TIN in the statement provided to the employee.  The statement to the employee must be furnished by Jan. 31 of the year following the year to which the information relates.

The IRS is considering ways to consolidate some of the reporting under §§ 6055 and 6056 (possibly through substitute statements) and ways to simplify the reporting, but larger corporations will likely be required to collect all of the above information.

Transparency in Coverage Reporting: Affordable Care Act section 1311(e) requires reporting to the U.S. Department of Health and Human Services and the Department of Labor of information about claims, payment policies and practices, enrollment and disenrollment, number of claims, information on cost-sharing and out-of-network coverage and periodic financial disclosures. None of the proposed regulations have been released yet as to the specific information that will need to be reported and how it will apply to employer-sponsored group health plans.  According to FAQs released by the agencies, the earliest this will apply to employer-sponsored group health plans will be 2015.

Quality of Care Reporting: Group health plans will also be required to report annually to HHS and to plan participants information about whether the plan has implemented provisions that are designed to improve health outcomes.  The statutory provision (found in section 2717 of the Public Health Service Act and incorporated into ERISA by reference through ERISA section 715) does not specify a deadline by which reporting must begin and no proposed regulations have yet been issued.

If you have questions about the changes, please contact Norbert F. Kugele (nkugele@wnj.com or 616.752.2186), or any other member of Warner’s Health Care Reform Task Force.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

ACCEPTCANCEL

Text

+ -

Reset