As Simple as Do-Re-Mi: Treasury and IRS Issue Final Rules on Employer Information Reporting under ACA

March 7, 2014 | By Lawrence J. Tabas

While no one would claim that understanding the Affordable Care Act (“ACA”) and all of its associated regulations is as simple as the chorus from a Jackson 5 song, the Treasury and the Internal Revenue Service announced final rules (“Final Rules”) Wednesday to make it easier for employers to report on employee health coverage. The Final Rules apply to Sections 6055 and 6056 of the Internal Revenue Code (“IRC”), which describe employer reporting for the purpose of monitoring whether an employer is compliant with the ACA’s Employer Mandate. The Employer Mandate generally requires employers with 50 or more full-time employees to offer coverage to their full-time employees that meets minimum value and affordability standards under the ACA or pay a penalty, though compliance has been pushed back a year for certain employers. According to a Treasury press release, the Final Rules provide for a single, combined form for information reporting under both IRC 6055 and 6056 as well as a simplified option for employer reporting of “qualified offers” of coverage to employees.

IRC 6055 describes reporting requirements for self-insuring employers, insurers and certain other providers of minimum essential coverage, while IRC 6056 describes reporting requirements for applicable large employers. Under the Final Rules, reporting for both IRC 6055 and 6056 will be made on the same form with the stated goal of eliminating duplicative filings by employers. Large employers that self-insure (employers that pay their employees’ medical costs directly, instead of joining a traditional plan) will fill out both sections of the form. Large employers that do not self-insure will only fill out the top half of the form, for reporting under IRC 6056.

What sort of information needs to be reported? According to the Final Rules, for IRC 6055, an employer must generally report information about the employer, the employees insured, and information on the minimum essential coverage provided. IRC 6056 requires applicable large employers to report information about themselves, such as the number of full-time employees for each month during the calendar year, certify whether they offered coverage to their full-time employees, and provide certain information about the plan offered, like the monthly premium for the plan.

The Final Rules also simplified the reporting obligations of employers who make qualifying offers of coverage to their employers—according to the Treasury press release, a qualifying offer of coverage is “an offer of minimum value coverage that provides employee-only coverage at a cost to the employee of no more than about $1,100 in 2015” combined with an offer of coverage to the employee’s family, which would not need to meet the cost threshold. The Final Rules allow employers to report different information based on whether or not a given employee was offered coverage for all 12 months of a year or for fewer than 12 months in a year. For employees receiving a qualified offer for all 12 months, “employers will need to report only the names, addresses and taxpayer identification numbers” of such employees. For employees receiving a qualifying offer in fewer than 12 months in the year, employers will be able to report such employees “for each of those months by simply entering a code.”

As stated above, the Employer Mandate has been pushed back for many employers. Employers with 50 to 99 full-time employees will not be subject to penalties under the Employer Mandate for failing to provide health insurance coverage to employees in 2015. Moreover, employers with 100 full-time employees or more need only offer coverage to 70% of their full-time employees in 2015 to be compliant with the regulations. Despite these delays, the information reporting provisions take effect in 2015, and employers should begin to familiarize themselves with the requirements.

The Health Law Gurus™ will continue to follow the implementation of the Employer Mandate and other provisions of the ACA.

We encourage you to share your experiences and thoughts about the Employer Mandate and employer reporting requirements with us and our readers in the comments section below.

To view the Treasury press release, click here.

About the Authors

Lawrence J. Tabas


Lawrence is the Chair for Obermayer’s Health Care Law Department and Election Law Practice Group. Lawrence’s Health Care Law legal experience includes the representation of Pennsylvania County governments in Behavioral Health Managed...

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