- Basics of Employer Reporting: Questions 1-4
- Who is Required to Report: Questions 5-8
- Methods of Reporting: Questions 9-13
- What Information Must ALE Members Report: Questions 14-16
- How and When to Report the Required Information: Questions 17-25
1. What are the information reporting requirements for employers relating to offers of health insurance coverage under employer-sponsored plans?
The Affordable Care Act added section 6056 to the Internal Revenue Code, which 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 a definition of applicable large employer, see question 5, below.)
Under the regulations implementing section 6056, an applicable large employer may be a single entity or may consist of a group of related entities (such as parent and subsidiary or other affiliated entities). In either case, these reporting requirements apply to each separate entity and each separate entity is referred to as an applicable large employer member (ALE member). See question 7 for more information about the treatment of related entities.
The IRS will use the information provided on the information return to administer the employer shared responsibility provisions of section 4980H. The IRS and the employees of an 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.
ALE members that sponsor self-insured group health plans also are required to report information under section 6055 about the health coverage they provide (See our section 6055 FAQs). Those ALE members that sponsor self-insured group health plans file with the IRS and furnish to employees the information required under sections 6055 and 6056 on a single form. The IRS and individuals will use the information provided under section 6055 to administer or to show compliance with the individual shared responsibility provisions of section 5000A.
2. When do the information reporting requirements go into effect?
The information reporting requirements under section 6056 are first effective for coverage offered (or not offered) in 2015. An ALE member must file information returns with the IRS and furnish statements to employees beginning in 2016, to report information about its offers of health coverage to its full-time employees for calendar year 2015.
Notice 2013-45 provides transition relief for 2014 from the section 6056 reporting requirements and the section 6055 reporting requirements for health coverage providers and, thus, the section 4980H employer shared responsibility provisions as well. Accordingly, neither the reporting requirements nor the employer shared responsibility provisions apply for 2014. The transition relief applies to all ALE members including for-profit, non-profit, and government entity employers. However, in preparation for the application of the employer shared responsibility provisions beginning in 2015, employers and other affected entities may comply voluntarily for 2014 with the information reporting provisions and are encouraged to maintain or expand coverage in 2014. Returns filed voluntarily will have no impact on the tax liability of the employer. For more information about voluntary filing in 2015, including the requirements for filing electronic returns, see IRS.gov.
3. Is relief available from penalties for incomplete or incorrect returns filed or statements furnished to employees in 2016 for coverage offered (or not offered) in calendar year 2015?
Yes. In implementing new information reporting requirements, short-term relief from reporting penalties frequently is provided. This relief generally allows additional time to develop appropriate procedures for collection of data and compliance with the new reporting requirements. Accordingly, the IRS will not impose penalties under sections 6721 and 6722 on ALE members that can show that they have made good faith efforts to comply with the information reporting requirements. Specifically, relief is provided from penalties under sections 6721 and 6722 for returns and statements filed and furnished in 2016 to report offers of coverage in 2015 for incorrect or incomplete information reported on the return or statement. No relief is provided in the case of ALE members that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. However, consistent with existing information reporting rules, ALE members that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied. See question 24 for more information about penalties under sections 6721 and 6722.
4. Where is more detailed information available about these reporting requirements?
The regulations under section 6056 provide further guidance on the information reporting requirements for applicable large employers, and the regulations under section 6055 provide guidance on the information reporting requirements for insurers and other health coverage providers. Regulations on the employer shared responsibility provisions under section 4980Hprovide guidance on determining applicable large employer status and determining full-time employee status, including defining and providing rules for calculating hours of service. ...
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