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 with his or her 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 making sure they have SSNs for all covered individuals. If an employer does not have an employee’s SSN, it must take certain steps to obtain the number. The steps include:
- Requesting the SSN at the individual’s first enrollment in health coverage.
- Requesting the SSN again at a reasonable time after the first enrollment.
- Requesting the SSN a third time by December 31 of the year following the first request.
A filer may be penalized if Form 1094 is transmitted to the IRS without a proper SSN. Employers should take steps now to make sure it gets proper SSNs for all employees and covered individuals.