The Affordable Care Act requires insurers and sponsors of self-funded health plans to report to the IRS information about individuals enrolled in health coverage. An individual is identified in the reporting by Social Security Number (SSN). The IRS uses the SSN to match information sent by plan sponsors and health plans to information submitted on an individual’s federal income tax return.
Employers with self-funded health plans are responsible for obtaining any missing SSNs for employees and covered dependents. An employer will not be subject to a penalty for failing to use a correct SSN if it takes the following steps:
- The employer requests the SSN at the individual’s first enrollment in health coverage.
- The employer requests the SSN again at a reasonable time after the first enrollment.
- The employer makes a third request by December 31 of the year following the first request.
If after taking these steps, the employer is still not able to obtain the SSN, the employer may use the individual’s date of birth for reporting. The IRS has once again said it would not assess penalties if employers make a “good faith effort” at compliance for the 2019 reporting year.