On September 9, 2013, the IRS released proposed regulations on the Affordable Care Act (ACA)'s annual information reporting requirements under Internal Revenue Code (IRC) sections 6055 and 6056. Employers and medical benefits providers have been eagerly awaiting these new proposed regulations.
Who is responsible for the reporting?
IRC section 6056: Large employers (as defined by the Employer Shared Responsibility Provisions) with both fully-insured and self-insured plans are subject to the reporting. This means that employers subject to the 2015 penalties must comply with this reporting requirement.
IRC section 6055: Employers who sponsor self-insured health plans
How does an employer report the information?
IRC section 6056: Forms 1094-C and 1095-C (or a substitute form if certain requirements are met)
IRC section 6055: Form 1095-B (or a substitute form if certain requirements are met)
When will reporting begin?
IRC sections 6065 & 6055: February 28, 2016 (or March 31, 2016 if filed electronically). The report must cover information for the 2015 calendar year. Employers must continue to report annually.
The IRS encourages employers to voluntarily comply with the information reporting provisions in 2014 in order to test reporting systems and plan designs prior to full implementation in 2015.
What information must be reported to the IRS?
IRC section 6056: For each person enrolled in coverage, the employer must report to the IRS the following:
IRC sections 6056 & 6055: Employers must provide written notice to covered individuals of the following:
The proposed regulations state that simplified reporting methods are under consideration, and the IRS may request additional information from employers, including:
Where can employers obtain more information? The proposed regulations are available at https://www.federalregister.gov/articles/2013/09/09/2013-21783/information-reporting-of-minimum-essential-coverage and https://www.federalregister.gov/articles/2013/09/09/2013-21791/information-reporting-by-applicable-large-employers-on-health-insurance-coverage-offered-under.
Simply put, according to ACA guidelines, you're new company can not obtain group benefits until there is at least one person on payroll for 50% of the previous quarter.
For example, you've incorporated in December of the previous year but you have no W2 employees until March of the new year. Your company would be ineligible to start a benefit program until June 1. This would be the beginning of the 3rd Quarter.
Other guidelines and Underwriting requirements for carriers in California can be found in this fantastic spreadsheet below.
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