Final Rules Issued on Information Reporting for Employers and Insurers Under the ACA

Today, the U.S. Department of the Treasury and the Internal Revenue Service published Final Rules to implement the information reporting provisions for insurers and certain employers under the Affordable Care Act (“ACA”), which will take effect in 2015.

The Final Rules apply to Sections 6055 and 6056 of the Internal Revenue Code (“IRC”), which describe employer reporting for the purpose of monitoring whether an employer is compliant with the ACA’s Employer Mandate. The Employer Mandate generally requires employers with 50 or more full-time employees to offer their full-time employees coverage that meets minimum value and affordability standards under the ACA or pay a penalty, though compliance has been pushed back one year for certain employers. Employers with 50 to 99 full-time employees will not be subject to penalties under the Employer Mandate for failing to provide health insurance coverage to employees in 2015. Moreover, employers with 100 or more full-time employees need only offer coverage to 70% of their full-time employees in 2015 to be compliant with the regulations. Despite these delays, the information reporting provisions take effect in 2015, and employers should begin to familiarize themselves with the requirements.

IRC 6055 describes reporting requirements for self-insuring employers, insurers and certain other providers of minimum essential coverage, while IRC 6056 describes reporting requirements for applicable large employers. Under the Final Rules, reporting for both IRC 6055 and 6056 will be made on the same form with the stated goal of eliminating duplicative filings by employers. Large employers that self-insure (employers that pay their employees’ medical costs directly, instead of joining a traditional plan) will fill out both sections of the form. Large employers that do not self-insure will only fill out the top half of the form, for reporting under IRC 6056.

According to the Final Rules, for IRC 6055, an employer must generally report information about the employer, the employees insured, and information on the minimum essential coverage provided. IRC 6056 requires applicable large employers to report information about themselves, such as the number of full-time employees for each month during the calendar year, to certify whether they offered coverage to their full-time employees, and to provide certain information about the plan offered, such as the monthly premium for the plan.

The Final Rules also simplified the reporting obligations of employers who make qualifying offers of coverage to their employers.  According to the Treasury press release, a qualifying offer of coverage is “an offer of minimum value coverage that provides employee-only coverage at a cost to the employee of no more than about $1,100 in 2015” combined with an offer of coverage to the employee’s family, which would not need to meet the cost threshold. The Final Rules allow employers to report different information based on whether or not a given employee was offered coverage for all 12 months of a year or for fewer than 12 months in a year. For employees receiving a qualified offer for all 12 months, “employers will need to report only the names, addresses and taxpayer identification numbers” of such employees. For employees receiving a qualifying offer in fewer than 12 months in the year, employers will be able to report such employees “for each of those months by simply entering a code.”