Tag Archives: IRS

ACA Employer Reporting Obligations are Effective January 1, 2015 – Are You Ready?

Contributed by Kelly Haab-Tallitsch

Beginning January 2015, employers will be subject to extensive ACA reporting requirements. Although submission of the data for 2015 will not take place until early 2016, employers and insurers need to start capturing the required data in January and should ensure that all the proper data can be captured and tracked prior to the beginning of the year.

The rules require extensive data reporting and are intended to help the IRS enforce various tax provisions of the ACA, including the employer and individual mandates.  Proposed instructions for reporting and draft forms were issued by the IRS at the end of August.

Employer Mandate Reporting – IRC Section 6056

Employers with more than 50 full-time equivalent employees are required to report if they made a “qualifying offer” of coverage to individual full-time employees and their dependents on a per month, per employee basis. The required amount of data is extensive and includes:

  • Name, address, and SSN of each full-time employee and the months, if any, during the calendar year which the employee was covered under the health plan;
  • The months for which minimum essential coverage was available;
  • Each full-time employee’s share of the lowest cost monthly premium (self-only) for coverage providing minimum value offered to that full-time employee under an eligible employer-sponsored plan, by calendar month; and
  • The number of full-time employees for each month during the calendar year.

Certain additional information will be required through indicator codes.

Individual Mandate Reporting – IRC Section 6055

Employers with self-funded plans (including those with under 50 employees) and insurers are required to report overall information on the plan and the plan sponsor, as well as data for each individual covered under the plan. The required individual information includes:

  • Name, address, and SSN (or date of birth if SSN not available) of each individual covered; and
  • Months during the calendar year when the individual was covered.

Employers who are self-funded are subject to both the required individual mandate reporting and the employer mandate reporting and will report for both at the same time on the same forms.

Timing and Implications

Under both IRC Sections 6055 and 6056, the reporting entity (employer or insurer) is required to report data on the prior calendar year to employees by January 31 and to the IRS by March 31.

Even though reports will first be submitted in early 2016 for calendar year 2015, the reporting period begins January 1, 2015, requiring employers to start capturing the needed data as of that date. Employers must take necessary steps now to ensure that all required data can be tracked prior to the first of the year.


There’s No Escaping Taxable Wages: Are You Improperly Giving Employees Nontaxable Dollars to Purchase Individual Coverage?

Contributed by Rebecca Dobbs Bush

It’s that time of year again when we’re all settling up with the IRS and hoping and searching for as many deductions as we can.  Many employers would like a way to offer employees nontaxable dollars with which they could purchase individual coverage through the marketplace or in the individual private market, without the employer needing to establish its own group health plan (or allowing the employer to terminate the existing group health plan they might be providing).

However, the following prohibitions took effect January 1, 2014:

  • Stand-alone HRAs can no longer be used to provide employer-sponsored health coverage to active employees.
  • Employer payment plans are prohibited.
  • Premiums for coverage elected through the ACA Marketplace or a state-based exchange cannot be paid for or reimbursed through an employer’s cafeteria plan.
  • Health FSAs can be offered to employees only if those employees are also eligible for the employer’s group health plan (major medical plan).

As alternative options, employers can:

  • Adopt a small group market plan through the SHOP Marketplace for small employers
  • Pay for individual policies for employees with dollars reported as taxable wages and subject to employment taxes and income tax withholding, or
  • Reimburse employees with taxable dollars.