The ACA created Internal Revenue Code (IRC) Sections 6055 and 6056 which require employers, insurers, and other reporting entities report health insurance information to the IRS for purposes of enforcing the Individual Responsibility (aka “Individual Mandate”) and Employer Shared Responsibility (aka “Play or Pay”) provisions of the ACA.
Section 6055 requires reporting by issuers (carriers), small self-insuring employers not subject to “Play or Pay”, and other parties (e.g. unions) via forms 1094-B and 1095-B regarding Minimum Essential Coverage (MEC) to assist in the enforcement of the Individual Responsibility mandate. Issuers that provide MEC report on the individual and group plans in the private market and SHOP marketplace plans, sending a statement to each covered individual.
Section 6056 requires Applicable Large Employers (ALEs) subject to “Play or Pay” to report if they offer MEC and affordable health coverage to their full-time employees and their dependents. ALEs are employers with 50 or more full-time equivalent employees, determined by the number of employees in the preceding calendar year. Employers report using forms 1094-C and 1095-C which information about the coverage offered to each employee, including the cost of self-only coverage, per month.
- Fully insured plans complete Parts I and II
- Self-funded plans must complete Parts I, II and III
- Multi-Employer (union) plans require union/employer coordination to complete lines 14, 15 and 16
Reporting Information, Due Dates and Penalties
For more information on IRC Sections 6055 and 6056, see here: https://www.irs.gov/affordable-care-act/employers/questions-and-answers-about-information-reporting-by-employers-on-form-1094-c-and-form-1095-c#.
- Notice 2016-4, issued 12-28-2015, delayed reporting of 2015 data in 2016
- Revenue Notice 2016-11 increased penalties for 1094/1095 reporting for taxable years beginning in 2015
- Notice 2016-70, issued 12-5-2016, 2016 delayed reporting of 2016 data in 2017
- Letter 5699 sent by the IRS to ALEs in 2017, is a compliance audit notice for ALEs who failed to file reports for tax year 2015
The IRS requires issuers retain copies of all forms for at least three years from the reporting due date.