Reporting IRS 6055 & 6056

By: Robert Pusateri, Capstone Benefits Consultant March 13, 2015

The IRS will be sending multiple forms for tax year 2015 for employers to fill out and return to the IRS. These forms are the key to determine if individuals or employees have to pay a penalty or if they are really eligible to receive premium tax credits from the online Exchange/Marketplace. Please contact your broker, first, to distinguish if you are truly an Applicable Large Employer (ALE). This is key and could save you hundreds of thousand dollars.

IRS Code Section 6055

Information reporting under Section 6055 and 6056 is voluntary (not mandatory) for calendar year 2014. Reporting is first required in early 2016 with respect to the calendar year for 2015. (irs.gov)

Section 6055 of the IRS requires insurance carriers that provide Minimum Essential Coverage (MEC) to file an information return with the IRS and also send a statement to individuals with coverage. The information used in these reports will show that the individuals are compliant with the individual shared responsibility provision, which means individuals have essential coverage to avoid paying a penalty under the individual mandate law or if employees may be eligible for a premium tax credit if they purchase insurance in an Exchange/Marketplace. The 1094-B and 1095-B forms are the reports that the IRS will be receiving to determine if you have to pay a penalty in 2016 for the calendar year 2015.

IRS Code Section 6056

Section 6056 reporting requirements apply only to “Applicable Large Employers (ALE)” – defined as those who employed on average at least 50 full-time employees and full-time equivalents on business days during the prior calendar year. Employers with fewer than 50 full-time employees are exempt. Large employers must file an information return annually with the IRS and also must provide annual statements to their full-time employees. The information will include which individuals are covered and for how many months.

All Large Applicable Employers must provide detailed information on the number of full-time employees, and the name, address and Social Security number of each; whether the employer coverage offered provided minimum essential coverage, minimum value, met the 9.5% affordability test, was offered to full-time employees and their dependents and the employee’s share of the cost for the lowest-cost employee-only coverage offered, A lot of additional information is required. There will be indicator codes on the reporting document forms 1094-C and 1095-C.

The final regulations simplify the report on an annual basis if the employer makes a “qualifying offer” to any full-time employee for all 12 months of the year. An employer who marks that they made a qualifying offer to at least 95% of its full-time employees can take advantage of the simplified filing.

The IRS return is due by the last day of February 2016 and by March 31, 2016 if the report is filed electronically. The annual statements to employees are due by January 3, 2016 for the calendar year 2015.

More Information and these IRS forms can be found at IRS.GOV