The IRS issued draft instructions for the forms that employers and insurers must use to report health care reform compliance under Internal Revenue Code section 6055 and 6056. The forms and instructions will be finalized later this year. The IRS also issued a set of frequently asked questions to provide guidance on the reporting requirements.
Some noteworthy items include:
- The IRS will not impose penalties on employers who make a good faith effort to comply with the reporting requirements.
- An employer may hire a third party to report to employees and the IRS, but hiring a third party does not transfer an employer’s ultimate responsibility for compliance.
- Parts I and III of IRS Notice 1095-C must be completed for any employee who enrolls in the plan, regardless of whether the employee is full-time.
- Forms 1095-C and 1094-C information returns must be filed by February 28 (for paper filings), or March 31 (for electronic filings) of the year following the calendar year to which the return relates.
- An employer must file one 1094-C that is the “authoritative transmittal” which reports aggregate employer-level data for all full time employees, even employees in separate divisions.
- Employers must provide a Form 1095-C to each full time employee by the January 31 of the year after the year to which the form relates. The form should be mailed, unless the employee affirmatively assents to receiving it electronically.
- Alternative reporting methods are available. The alternative reporting methods are optional so that an employer may choose to report for all of its full-time employees using the general method, even if an alternative reporting method is available.
- The alternative reporting methods, in certain situations, may permit employers to provide less detailed information than under the general method for reporting.
- The alternative reporting methods are
- Reporting based on certification of qualifying offers; and
- Option to report without separate identification of full-time employees if certain conditions are satisfied (98% offer)
The guidance is complex. Employers with 50 or more full time employees and employers with self-funded health plans should be gearing up to meet their reporting requirements. For information about BAS’ health care reform reporting module, contact solutions@BASusa.com.
