HNI Compliance Advisor
The final versions of the forms and instructions for ACA employer reporting requirements now are available.
The forms and instructions be found via the following links:
These forms are related to the ACA employer reporting requirements set out in IRC Sections 6055 and 6056. These sections call for some employers to report to the IRS information about employer-sponsored coverage. Failure to comply with the reporting rules could come with a hefty price tag — keep reading for more details!
What Employers Need to Know About the Forms and Related IRC Sections
IRC Section 6055 calls for issuing separate information returns to each covered individual. For fully insured plans, Form 1095-B is the report issued by the insurer to individuals, and Form 1094-B is used to transmit the individual forms to the IRS. For self-insured plans, Form 1095-C is issued by the employer to covered individuals and Form 1094-C is used to transmit the individual forms to the IRS.
The goal of Section 6055 is to determine whether (and under which months) individuals were covered by minimum essential coverage. Section 6055 calls for the health plan issuer (the insurance company, if you're fully insured, or the employer, if you sponsor a self-insured plan) that provides minimum essential coverage to an individual during the calendar year to deliver/file two documents:
1.) Form 1095-B, an information return — to be delivered to the covered individual and filed with the IRS
2.) Form 1094-B, a transmittal form — to be filed with the IRS
IRC Section 6056 requires reporting by applicable large employers and also calls for issuing separate returns to each individual (Form 1095-C) and, again, using a transmittal form (1094-C) to send these separate returns to the IRS. An applicable large employer that is fully insured only would complete Parts I and II of Form 1095-C. An applicable large employer that is self-insured would complete the entire Form 1095-C, which consolidates the employer's 6055 and 6056 reporting obligations on one form.
Section 6056 is for applicable large employers — employers with at least 50 full-time employees. As you are likely aware, applicable large employers are required to offer health coverage that meets quality and affordability standards as part of the "pay or play" provisions of the ACA.
The forms associated with 6056 are how the IRS is verifying whether you met your requirements and whether they need to be paying out subsidies for any employees that didn't get adequate coverage through you.
Section 6056 calls for applicable large employers to file/deliver two different documents:
1.) Form 1095-C, an information return — to be delivered to the employee and filed with the IRS
2.) Form 1094-C, a transmittal form
Self-insured employers that are also applicable large employers (and thus must meet both the 6055 and 6056 reporting requirements) can use both sections of Form 1095-C and 1094-C to meet both requirements.
The IRS also has shared best practices for tax preparers related to the individual shared responsibility provisions, including the follow advice:
"While employers may be able to assist their employees in documenting their coverage, you should not routinely or automatically advise your clients to seek documentation from their employer. Employers are not required to provide this documentation for the 2014 tax year."
Why the ACA Employer Reporting Requirements Matter
The feds want proof of minimum essential coverage, and they want to know whether you need to be paying penalties for any employees who didn't get adequate coverage through you.
The IRS, of course, will judge the compliance of your business based on the data you report via the forms. Failure to comply with the ACA employer reporting reqs could cost up to $200 per return.
We've been covering the ACA employer reporting requirements on Steal These Ideas and our website for a while now:
- A Crash Course in 6055 and 6056 Reporting on Your Benefits: What you need to know about IRC Sections 6055 and 6056 and why compliance will be a challenge.
- 6 Steps to Prep for 6055 & 6056 ACA Employer Reporting Requirements: Discover how to set up your business for reporting compliance.
- ON-DEMAND WEBINAR: HR Compliance Crash Course: Preparing for 6055 and 6056 Reporting Requirements: Access the webinar recording and slide deck to master the who, what, when, and how of this regulation to get you on track to be compliant.
How's your progress been with getting these reporting requirements under control? What other questions do you have? Please share in comments.