In addition to imposing substantive requirements on health insurance issuers in the group and individual markets and employer-sponsored group health plans, the Patient Protection and Affordable Care Act (Act) imposes three notice requirements that are of particular interest to employers.
Under Internal Revenue Code (Code) section 6051(a)(14), employers must report the value of coverage under an employer-sponsored group health plan on employees’ Form W-2.
Under Code section 6055, health insurance issuers, certain employers, and others that provide “minimum essential coverage” to individuals must report to the Internal Revenue Service (IRS) information about the type and period of coverage and furnish statements to covered individuals.
Under Code section 6056, “applicable large employers” (i.e., those with 50 or more full-time and full-time equivalent employees on average business days during the previous calendar year) must report to the IRS information about their compliance with the employer shared responsibility (a/k/a “pay-or-play”) provisions of the Act. Section 6056 also requires those employers to furnish statements to employees.
The Form W-2 reporting requirement took effect beginning with 2012. (This requirement is not further discussed in this advisory.) The Code sections 6055 and 6056 reporting requirements are effective for years beginning after December 31, 2013. But in Notice 2013-45, the Treasury Department and IRS delayed these rules for a year, along with the employer shared responsibility rules that apply to applicable large employers. (Please see our July 10, 2013 client advisory for a discussion of Notice 2013-45). As a result, the 6055 and 6056 reporting rules will take effect for years beginning after December 31, 2014.
In Notices 2012-32 and 2012-33, the IRS invited comments on the 6055 and 6056 reporting requirements. (Please see our May 8, 2013 client advisory for a discussion of Notices 2012-32 and 2012-33). More recently, on September 5, the Treasury Department and IRS issued proposed regulations under both requirements.
Code Section 6055
Code section 6055 requires information reporting by any person that provides “minimum essential coverage” to an individual during a calendar year. Under other provisions of the Act, U.S. citizens and green card holders are generally required to maintain minimum essential coverage or pay a tax penalty. Minimum essential coverage means and includes coverage under Medicare, Medicaid, the Children’s Health Insurance Program (CHIP),