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2016 Affordable Care Act reporting requirements looming 

by Bob Haynes, League Associate Director, Risk Management Services

Are you preparing now for 2016 Affordable Care Act IRS reporting requirements? If you are not familiar with the IRS reporting under Sections 6055 and 6056, now is the time to begin. The ACA includes both an individual mandate and an employer mandate, essentially requiring that almost everyone have health insurance and that all employers with 50 or more fulltime equivalents provide affordable coverage that meets minimum essential requirements. These reports provide the IRS with information needed to validate individuals covered by an employer plan as well as to make sure employers are meeting their obligations to provide acceptable  coverage under the Act.

Small employers (less than 50 FTEs) only have to satisfy the 6055 reporting requirement; for small employers who have true insurance coverage, the 6055 form will be filed by the insurance carrier.

For larger employers (more than 50 FTEs) that have true insurance coverage, the insurance carrier will file a form to meet the 6055 obligation, and the employer is responsible for filing a form to meet the 6056 obligation.

For small employers who are selfinsured (including by participation in a shared risk pool), only the 6055 form is required and must be filed by the employer.

For large employers who are selfinsured (including by participation in a shared risk pool), the both 6055 and 6056 are required to be filed by the employer in a single, combined form.

Section 6055 and Section 6056 are required to be submitted by February 28 or March 31 if filing electronically. While these reports are not due for another nine or ten months, now is the time to begin tracking the required data and making preparations. Examples of data that must be provided under Section 6055 include identifiable information on the employer, employees, non-employees such as retirees or COBRA beneficiaries, covered dependents or spouses, months on the plan for each covered individual, etc.

Given the 6055 report must include information on dependents, such as a Social Security Number or birth date that the employer will likely not have or easily be able to obtain, the rules are specific as to what constitutes reasonable efforts and how often an employer should request this information. It’s not too early to be clear regarding the information that will be required and establish the protocols for requesting the information as allowed by the rules.

Examples of information that is required under Section 6056 (not required for small employers) include certification as to whether the applicable large employer offered its full-time employees and their dependents the opportunity to enroll by calendar month, the months during the calendar year that the coverage was available, each full-time employee’s share of the lowest cost monthly premium (selfonly) by calendar month, number of full-time employees for each month during the calendar year, tax identification number of each full-time employee during the calendar year and the months during which the employee was covered under the plan.

The rules also require that employees be provided with statements annually and not later than January 31. These reports, among other things, enable the employee to establish when they were covered by your plan during the year. These can be provided electronically; however, consent is required if this method is chosen.

Again, it is wise to begin early. Failure to meet requirements results in employer penalties. You may recall that large employers with less than 100 employees are offered transitional relief from the employer mandate, thus not subject to the mandate until 2016. These employers are not required to offer minimum essential coverage until 2016; however, they are still subject to the reporting requirements.

We are currently working with MedCost to provide educational materials for members of our Health Benefits Trust. This will include written materials
and webinar opportunities. Additionally, Gallagher Benefit Services has developed a “toolkit” for Sections 6055 and 6056 reporting requirements. You can access the kit here.

This site offers a multitude of resources to assist in your compliance efforts.