Starting in 2014, the Affordable Care Act requires that nonexempt individuals either maintain “minimum essential coverage” or pay an individual payment with their income tax returns. Minimum essential coverage may be provided by employer-sponsored plans, government-sponsored programs or by health insurance coverage offered in the individual market. Certain taxpayers are entitled to a premium tax credit to make the requisite minimum essential coverage more affordable.
To enable the IRS to administer and enforce these provisions in the Affordable Care Act, Section 6055 of the Affordable Care Act requires providers of minimum essential coverage to report certain information to the IRS as well as provide written statements to each individual for the individual’s use in his or her tax return filing. On September 9, 2013, the IRS published proposed rules at 26 CFR Parts 1 and 301 (available here) describing the information that must be reported by providers of minimum essential coverage to the IRS, describing the information that must be provided on written statements to individuals, and the means by which providers of minimum essential coverage may provide the written statements to individuals electronically. Providers required to report information to the IRS must do so by February 28 (or March 31 if filed electronically) of the year following the calendar year in which it provided minimum essential coverage. Written statements must be provided to individuals on or before January 31 of the year following the calendar year in which minimum essential coverage is provided. The proposed regulations are not effective until calendar years beginning after December 31, 2014, and reporting entities will not be subject to penalties with respect to information that would have been required to be reported in 2015 for coverage in 2014.
Section 6056 of the Affordable Care Act requires applicable large employers, which are generally those that employed an average of at least 50 full-time employees on business days during the preceding calendar year, to file returns for each full-time employee and provide each full-time employee with a statement by January 31 of the calendar year following the year for which the return must be filed. This information is needed by the IRS to administer Section 4980H of the Affordable Care Act, which assesses a penalty on large employers if certain requirements are not met regarding health care coverage for full-time employees, and to verify an employee’s eligibility for the premium tax credit. The IRS also published proposed rules on September 9, 2013, implementing the reporting requirements at Section 6056 of the Affordable Care Act. These proposed rules are available here. The proposed regulations would not be effective until calendar years beginning after December 31, 2014, and reporting entities would not be subject to penalties with respect to information that would have been required to be reported in 2015 for coverage in 2014.