The Basics of the ACA’s Employer Reporting Requirements

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The Affordable Care Act requires employers and insurers to provide the information allowing the IRS to administer the employer mandate, subsidy eligibility on the public exchange, and the individual mandate.

The Act added two sections to the IRS code, section 6055 requires insurers and self-funded groups to report whether the insurance provided is minimum essential coverage.  Section 6056 requires employers with 50 or more full-time equivalents to report details about the group health insurance offered and employee information to determine whether the employer satisfies the “pay or play mandate” and whether the employee is eligible for a subsidy on the public exchange.  Insurers will handle the section 6055 individual mandate reporting for fully-insured groups, but large employers will be required to report under section 6056.

Large employers must report whether full-time employees and their dependents had the opportunity to enroll in coverage by calender month, the number of full-time employees for each calender month, the months coverage was available and the employee only premium for the lowest cost medical option providing minimum value for each full-time employee, the name, address, and social security number of each full-time employee, and the months each employee was covered by the employer’s group health plan.  The onerous reporting requirements for large employers gave rise to simplified options:

  • Certification of a qualifying offer-employers can report the name, address, social security number and indicator code for full-time employees that received a “qualifying offer” of coverage for all 12 months.  A qualifying offer is an affordable (according to the federal poverty limit), minimum value employee only option available to spouses and dependents.
  • 95% rule-for 2015, an employer can report the name, address, social security number, and indicator code for all full-time employees, if the employer certifies it made a “qualifying offer” of coverage to at least 95% of its full-time employees
  • 98% rule-an employer that certifies that affordable, minimum value coverage is offered to 98% of its full-time employees does not have to report any further information to the IRS

The Affordable Care Act reporting is due no later than March 31 if filing electronically and February 28 if filing by mail, following the calender year to which the reporting relates.  Employers with 250 or more employees must file electronically.