Whose Social Security numbers must we report under the Affordable Care Act (ACA), and what if we don’t have all the numbers we need?
Beginning in 2016, the ACA requires most employers and plan sponsors to send annual reports to employees and the IRS about their health coverage (or lack of it) under Sections 6055 and 6056 of the Internal Revenue Code.The 2016 reports will reflect what took place in 2015, so employers and plan sponsors should gather necessary information, including Social Security numbers, for employees and dependents who had health coverage during any of the months from January through December 2015.
The reports must identify:
- All individuals (including dependents) receiving health coverage
- All full-time employees of applicable large employers (ALEs).
Who reports under Section 6055?
Any entity that offers minimum essential coverage to its employees, members, or participants reports under Section 6055. For employers in multiemployer (Taft-Hartley) plans, the plan sponsor (the board of trustees) does the reporting.
What is reported under Section 6055?
Among other things, names and Social Security numbers of all the individuals receiving minimum essential coverage, including any spouses and/or dependents receiving coverage. Social security numbers of spouses and dependents not receiving coverage do not need to be reported.
If the plan sponsor cannot obtain a covered individual’s Social Security number, that person’s date of birth may be used instead, as long as the reporting entity makes a reasonable effort to obtain the Social Security number. A plan sponsor should make a reasonable effort in order to avoid penalties for incomplete or incorrect reporting.
What is a reasonable effort to obtain a Social Security number?
- Reporting entity should request the Social Security number at the time the relationship with the covered individual is established. The request may be made orally, in writing (including on an employment application), or by e-mail.
- If the number has not been provided, the reporting entity must request it again by December 31 of the first year of coverage.
- If the number still has not been provided, the reporting entity must make another annual request by December 31 of the following year.
- If the reporting entity followed these steps, it has acted in a responsible manner and does not need to try again. The covered person’s date of birth may be used instead.
The IRS has not supplied model language for requesting an individual’s Social Security number specifically for this purpose. However, a health care provider or employer might consider sending IRS Form W-9 to an individual. This is a standard form used to submit a Social Security number or tax identification number to an entity that requests it.
Who reports under Section 6056?
All applicable large employers (ALEs), including those that provide insured plans, self-funded plans, and even those that do not provide minimum essential health coverage, must report under Section 6056.
For ALEs participating in multiemployer plans, the employer is ultimately responsible for reporting. However, for ease of administration, the IRS will permit the multiemployer plan administrator to prepare returns regarding the ALE’s full-time employees that it covers, and/or assist the large employer in providing statements. The employer would have to prepare returns regarding its other full-time employees (those not eligible to participate in the multiemployer plan).
What is reported under Section 6056?
Names and Social Security numbers of all full-time employees must be reported, whether they received health coverage or not. Dependents and spouses do not need to be reported for this purpose.
IRS Questions and Answers on Information Reporting by Health Coverage Providers (see especially questions 3, 16, 17 and 18)
March 2014 Final Regulations (Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans)
March 2014 Final Regulations (Information Reporting of Minimum Essential Coverage)
2015 Forms and Instructions:
Form 1094-B Transmittal of Health Coverage Information Returns
Form 1094-C Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
Form 1095-B Health Coverage 2015
Form 1095-C Employer-Provided Health Insurance Offer and Coverage
Instructions for Forms 1094-B and 1095-B
Instructions for Forms 1094-C and 1095-C
Lois Mathis-Gleason, CEBS
Manager, Reference/Research Services at the International Foundation