IRS EMPLOYER REPORTING OF HEALTH COVERAGE

The IRS has released “draft” copies of the IRS Forms required for Applicable Large Employers (ALEs defined as 50 & up full-time employees) for the purpose of the healthcare coverage reporting effective for 2015 Calendar Years (IRS filings would be due in February 2016 for the 2015 Calendar Year). The update in this requirement attaches to IRS Code 6055 & 6056 Reporting Requirements which was put into legislation on Sept 5, 2013.

To help summarize, the IRS is requiring all employers to report information about the health plan coverage they offer (or do not offer) to employees. These reporting initiatives are the IRS’s auditing mechanisms to determine if ALEs are providing Minimum Essential & Affordable coverage to their employees under rules/guidelines set forth in the Employer Mandate. This is also how the IRS and Health & Human Services (HHS) will help determine if an employee qualifies for a subsidy on the Federal Marketplace. Here’s a link to a summary of this expansive piece of law:

IRS Employer Reporting of Health Coverage

Listed on the first page of the summary communication are four different IRS forms for purposes of this law, which can be very confusing. IRS Form 1095-C is the form that most employers will use to file under these rules. In addition to these IRS Forms, each reporting entity will be required to furnish annual statements to individuals who are provided Minimum Essential Coverage (all full-time employees). These employee statements will be due to employees by January 31st each year (Feb 1st in 2016, as Jan 31st is a Sunday). Employers are permitted to mail an employee in the same mailing one or more of the required information returns, such as Section 6055/6056 and their W-2 statements.

Please also note, medium sized employers (those between 50 & 100 full-time employees) were provided transitional relief from the Employer Mandate for 2015 (extension until 2016). However medium sized employers are still required to report these IRS filings and employee statements starting in 2016 for the 2015 Calendar Year.

If you have any questions, please call your Strickler representative, we will be sure to steer you in the right direction and assist in any way possible. We also encourage you to start these discussions with your accountants, paryroll team, broker and staff now so that everyone is prepared as this inches closer.