Update IRS Instructions for Reporting Employee Health Coverage

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Author: Johanna Montero-Okon

On March 5, 2014, the Department of Treasure issued final regulations on employer health insurance coverage information reporting. The information reporting relates to health insurance coverage that is offered by certain employers, referred to as applicable large employers, and reporting is to be provided by each member of an applicable large employer. A few months later the Department issued additional guidance announcing their decision to extend transition relief to employers for 2014 for the annual information reporting.

Generally, Code Section 6055(a) requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs, and other entity that provides Minimum Essential Coverage (MEC) to file annual returns reporting information for each individual to whom it was provided. An entity filing an information return reporting MEC must furnish a written statement to each individual on the return that shows the information that must be reported to the IRS. In addition, separate reporting requirements that apply to “applicable large employers” are provided under Code Section 6056. The final regulations provide general and alternative reporting methods to employers that are subject to the Code Sec. 6056 information reporting requirements. Large employers, those with at least 50 Full-time employees, are required to annually report to the IRS information on the health care coverage that they offer, or do not offer, to full-time employees and to furnish related statements to their full-time employees.

On July 24, 2014, the IRS released draft forms that employers may use to report on health coverage that they offer to their employees. Specifically, Forms 1094-C and 1095-C may be used by applicable large employers in compliance with Code Section 6056. The Purpose of the forms is for ALE’s to report offers of health coverage to, and enrollment in health coverage by, their employees. The forms are also used in determining whether an employer owes payments under the Employer Shared Responsibility Rules. Both forms must be filed with the IRS by February 28 if filing on paper, or March 31 if filing electronically, of the year following the calendar year to which the return relates.

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