IRS Issues Proposed Rules on Employer Reporting of Health Plan Coverage

On Sept. 5, 2013, the Internal Revenue Service released two proposed rules on the Affordable Care Act’s requirements for certain employers to provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees. These reporting requirements, found in Internal Revenue Code sections 6055 and 6056, are intended to provide the IRS with information to administer other ACA mandates, such as the employer and individual mandates. Earlier this summer, these reporting requirements were delayed until 2015, along with the employer mandate penalties.

The first proposed rule addresses Code section 6056, which requires large employers subject to the pay or play rules to report to the IRS and covered individuals information on the health care coverage offered to full-time employees. The second proposed rule addresses Code section 6055, which requires health insurance issuers, self-insured health plan sponsors, government agencies that administer government-sponsored health insurance programs and any other entity that provides minimum essential coverage to report information on that coverage to the IRS and covered individuals.

The first Code section 6055 and 6056 reporting returns will be due in 2016 for coverage provided in 2015. For 2014, employers are encouraged to voluntarily comply with the reporting requirements; however, compliance is completely optional for 2014 and no penalties will be assessed for failing to comply.

For more information on these proposed rules, give us a call at (520) 721-4848.