ACA/IRS Reporting for Section 6055/6056

6055 6056 Photo For Web

Struggling with complex new ACA/IRS reporting guidelines?

Don't worry - we've got you covered!

When it comes to deciphering the new ACA/IRS reporting guidelines, your company needs a guide.  Turn to Group Benefits to help you:

  • Understand
  • Simplify
  • Comply

Our team of experts works hard to stay up to date on all of the latest requirements and reporting standards so that you can rest assured your business is in compliance.  We've sorted through all of the details and will help you find a reporting solution that both suits your business and is in compliance with the new guidelines.  We do all of this while saving you time, money and working to eliminate the stress that can come with complex regulations.

Below please find some background information on the new reporting requirements and how they may affect your business.  Call on Group Benefits to determine if/how these sections apply to you.

SECTION 6055

What is Section 6055, and how does the IRS use this information? 

  • 6055 reporting is designed to assist the government in enforcing the ACA Individual Mandate. 
  • The IRS and individuals use this information to indicate that they comply with the individual shared responsibility provision in section 5000A.
What organizations must report under Section 6055? 
  • Section 6055 reporting requires any entity (i.e. the insurance companies, self-funded plan) that provides minimum essential coverage (MEC) to an individual to report certain health insurance coverage information to the IRS.
  • In addition, the organization must provide the covered individual a written statement indicating the months during which they had coverage. 

What does minimum essential coverage entail? 

  • Minimum essential coverage (MEC) is defined as coverage under: Medicare, Medicaid, an eligible employer-sponsored plan, a health plan offered in the individual market, and other coverage recognized by the Secretary of Health and Human Services as MEC.

SECTION 6056

What is Section 6056, and how does the IRS use this information?  
  • 6056 reporting is meant to assist in enforcing the ACA Employer Mandate, and in determining premium tax credit eligibility.  
  • The IRS will use the information provided on the return to administer the employer shared responsibility provisions of section 4980H.  
  • The IRS and employees of an Applicable Large Employer (ALE) member will use the information provided as part of the determination of whether an employee is eligible for the premium tax credit under section 36B.
How is an Applicable Large Employer (ALE) defined?  
  • If an employer has at least 50 full-time employees, including full-time equivalent employees, on average during the prior calendar year, the employer is considered an ALE for the current calendar year, and is therefore subject to the employer shared responsibility provisions and the employer information reporting provisions.
What organizations must report under Section 6056?  
  • ALEs with at least 50 full-time employees, including full-time equivalents, are required to report.  
  • ALEs subject to the ACA’s shared responsibility provisions must file a return with the IRS that reports the terms and conditions of the health care coverage provided to the employer’s full-time employees for the calendar year.
  • In addition, related statements must also be provided to employees.

GENERAL

When do the new reporting requirements go into effect?  

  • Beginning in 2016, employers that sponsor fully-insured or self-funded group health plans are required under ACA to report information to the IRS about the health coverage provided during the prior calendar year (2015).  
  • Generally, the reporting dates mirror the Form W-2 due dates.  
  • Specifically, employers must file their reports on or before February 28 (or March 31, if filing electronically).
What are the penalties for non-compliance?  
  • Penalties for non-compliance under both IRC 6055 and 6056 are $100 for each failure up to a maximum of $1.5 million.
How can I be sure my organization is in compliance in a timely manner?  
  • Contact Group Benefits at 901.259.7999 or email tfinnell [at] groupbenefitsllc [dot] com to choose the right vendor for your organization.