Q: How will the government know that we offer our employees health insurance coverage so we’re not not assessed a penalty should they go to the exchange?
A: Starting in calendar year 2015, you will have to collect information on a monthly basis regarding which of your employees participates in your health insurance. This information must be reported to all of your full-time employees (FT Employees) by January 31, 2016, as well as to the IRS no later than February 28, 2016 (March 31, 2016, if filling electronically).
There are two types of filings—Section 6055 for insurance companies or self-funded employers, and Section 6056 for employers with 50 or more full-time equivalent (FTE) employees. The 6055 reporting is for minimum essential coverage and is reported on Form 1095-C. The 6056 reporting is the Employer Responsibility reporting and is reported on Form 1095-C, but it’s important to note that only the employer section needs to be completed.
The information that must be collected for the 6055 reporting (self-insured reporting of minimum essential coverage) is:
- Name, address, and SS# of the primary person on the policy
- Name, address, and SS# of each individual covered
- Months for which each individual was enrolled for at least one day and entitled to receive benefits
- Any other information required (a government catchall if it decides it needs more information)
This information goes to the IRS and the employee. The employee also gets the policy number and name, address, and contact information for school. If you are fully insured, your insurance company will report this to the individuals and IRS.
The information that all employers with 50 or more FTEs must report on Form 1095-C is:
- Name, address, and employer ID
- Name and telephone number of the employer’s contact person
- Calendar year for which the information is reported
- Certification as to whether the employer offered full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan by calendar month
- Months during the calendar year that minimum essential coverage was available
- Each FT Employee’s share of the lowest cost monthly premium(ee) for coverage providing minimum value offered to that FT Employee by calendar month
- Number of full time employees for each month of the calendar year
- Name, address, and SS# for each FT Employee during the calendar year and the months during which the employee was covered under the plan.
- Any other information required (a government catchall if they decide they need more information)
This information is also reported to the IRS and the employee. The name, address, and EIN of the employer is included in the employee’s report.
If you fail to comply by the deadline dates or do not correctly report the information, you may be subject to a $200 fine per incorrect report per year (up to $3 million).
Note: Originally, this reporting was to start this year (2014) and be reported in 2015 but the IRS delayed the reporting as they did not have a method in place for reporting. You can voluntarily comply with the reporting this year but you will have to comply in 2015 for reporting in 2016. You may want to use this time to set up procedures for collecting and reporting this information.
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