The ACA has several new reporting requirements for insurers, self-funded plans and large employers. These new reports, referred to as the Section 6055 and 6056 reports, are intended to help the IRS determine who is subject to the individual mandate penalty and the employer pay or play penalties. Due to the complexity of the rules and the fact the IRS hadn’t yet issued guidance, the original effective date was delayed until 2015 with the first reports being due in January of 2016. The IRS encouraged voluntary reporting for 2014.
In March, the IRS issued long awaited regulations on these reporting requirements. While the IRS offers several simplification methods of reporting, understanding whether you qualify for the simplified reporting is far from simple. In fact, very little about these reporting rules is simple.
In the preamble to these regulations, the IRS again encourages employers to voluntarily report for 2014…yet they give employers no incentive to report early. I would be shocked if many employers file these reports early. Many employers are going to have a hard enough time complying by the new effective date. And if any employer does comply early, I would bet that it is because they were confused on the deadline and not doing it out of the kindness of their hearts. While I am not advocating for early voluntarily compliance, I do recommend that employers should be familiarizing themselves with these new rules now to ensure their payroll systems can accommodate the reporting once it becomes effective