The IRS Section 6056 reporting requirements under the Patient Protection and Affordable Care Act (“PPACA”) have two essential elements: (1) reporting to the IRS; and (2) furnishing statements to employees and non-employees who are covered under an employer-sponsored health plan. To provide applicable employers with relief, the IRS has introduced several simplified reporting and statement furnishing methods. For information on how to determine which simplified method applies, please see our article, “Understanding the Essentials: Sections 6055 and 6056 Final Forms.”
The IRS Section 6056 reporting requirements under the Patient Protection and Affordable Care Act (“PPACA”) have two essential elements: (1) reporting to the IRS; and (2) furnishing statements to employees and non-employees who are covered under an employer-sponsored health plan. To provide applicable employers with relief, the IRS has introduced several simplified reporting and statement furnishing methods. For information on how to determine which simplified method applies, please see our article, “Understanding the Essentials: Sections 6055 and 6056 Final Forms.”
Of course, once an employer completes the analysis and determines whether any of the simplified methods is available to it, the questions that must be addressed are: What to report? What to furnish? To assist our clients in answering these questions, we have prepared a summary of the simplified methods available to employers who are required to file Forms 1094-C and 1095-C with the IRS. Note, however, that these simplified reporting and statement furnishing methods are optional, and employers may simply provide general reporting and furnish statements.
There are two types of simplified reporting (i.e., information provided to the IRS): (1) the 98% Offer Method (which impacts reporting of number of full-time employees on Form 1094-C), and (2) the Qualifying Offer Method (which impacts information provided on lines 14, 15, and 16 of Form 1095-C). A Qualifying Offer is an offer of coverage that is: (1) made to one or more full-time employees and provides minimum essential coverage (“MEC”) meeting minimum value requirements and whose cost, from the employee’s perspective and with respect to employee-only coverage, does not exceeding 9.56% for 2018 (9.86% for 2019 and adjusted annually) of the mainland single federal poverty line, and (2) includes an offer of at least MEC to the employee’s spouses and dependents. All employers who meet the applicable requirements may use any of the simplified reporting methods.
There is only one way to qualify for simplified furnishing (i.e., providing simplified statements) to individuals: the Qualifying Offer Method (which allows simplified statements to full-time employees who received a Qualifying Offer for all 12 months of the calendar year). However, employers who sponsor self-insured coverage can only provide simplified statements to employees who did not enroll in coverage. Employers sponsoring fully insured health plans may provide simplified statements (assuming all other requirements are met) to both employees who enroll in coverage and employees who do not enroll in the fully insured coverage.
For detailed information on the reporting and furnishing requirements, please see our article “IRS Releases Final Regulations on Employer and Issuer 6055 and 6056 Reporting Requirements.”
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