Section 6055 of the Affordable Care Act (ACA) requires employers, plan sponsors and/or insurers to send annual reports to employees and the IRS identifying all individuals, including dependents, receiving health coverage. The 2017 reports will reflect what took place in 2016. So employers and plan sponsors need to obtain information, including Taxpayer Identification Numbers (TIN), also known as Social Security numbers, for employees and dependents who had health coverage during any of the months from January through December 2016.
Submissions to the IRS are due on March 31, 2017 for those filing electronically and February 28, 2017 for paper forms. Organizations are required to distribute 2016 Forms 1095-C and 1095-B to employees by March 2, 2017. In other words, it may not be wise to put this off as you wait to see how the future of ACA unfolds. Below, I summarize who needs to report and what needs to be reported.
Who reports under Section 6055?
Any entity that provides minimum essential coverage to its employees, members or participants must report under Section 6055. For employers in multiemployer (Taft-Hartley) plans, the plan sponsor (the board of trustees) is responsible for this reporting. The insurance company does the 6055 reporting for plans that are fully insured.
[Related: Ask the 1095 Expert – An Open Q&A Session and 5 Tips to Conduct Your Own 1095 Audit]
What is reported under Section 6055?
Among other things, names and Social Security numbers of all individuals receiving minimum essential coverage, including any spouses and/or dependents receiving coverage, must be reported. 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 demonstrates that it properly solicited the TIN but did not receive it. A plan sponsor should make a good-faith effort in order to avoid penalties for incomplete or incorrect reporting.
[Related: Overview of ACA Online Course]
What does it mean to properly solicit the TIN (Social Security number)?
The 18th Q&A in IRS Questions and Answers on Information Reporting by Health Coverage Providers gives the following steps for soliciting a Social Security number:
- Request the Social Security number at the time the relationship with the payee is established (such as an employment relationship).
- Make a second request by December 31 of the year in which the relationship begins (or January 31 of the following year if the relationship begins in December).
- Make another request by December 31 of the following year.
- If the SSN is still not provided, there is no need to continue soliciting the SSN.
What about someone who no longer receives health coverage?
A reporting entity does not have to request a Social Security number from an individual whose coverage is terminated, according to IRS Notice 2015-68.
Is there model language to request a Social Security number?
The IRS has not supplied model language for requesting an individual’s Social Security number for health coverage reporting.
IRS Notice 2016-70
IRS Notice 2015-68
IRS Questions and Answers on Information Reporting by Health Coverage Providers
March 2014 Final Regulations (Information Reporting of Minimum Essential Coverage)
2016 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
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
The future of ACA continues to be uncertain. We’ll be here to keep you in check with requirements and due dates here on the Word on Benefits.
Lois Gleason, CEBS
Manager, Reference/Research Services at the International Foundation