Employee Benefits Compliance, Employer Mandate, Large Employers, Laws, Regulations & FAQs, Reporting Requirements

IRS Issues Proposed regulations on ACA Information Reporting by Large Employers and “MEC” Providers

personal information

On September 6, 2013, the IRS released advance copies of proposed regulations on information reporting requirements under Internal Revenue Code sections 6055 and 6056.  The Affordable Care Act (ACA) requires “applicable large employers” to file annual reports detailing the terms and conditions of health coverage provided to full-time employees (IRC section 6056).  Click here for these proposed regulations (72 pages).  ACA also requires similar annual reporting by insurers, self-insured plans (plan sponsors) and other entities that provide “minimum essential coverage” (MEC). Click here for these proposed regulations (42 pages).

These eagerly anticipated regulations are scheduled to be published in the Federal Register on September 9.  We will publish summaries of the proposed regulations next week.

Background

The information reporting requirements originally were scheduled to become effective in 2014, with annual reports due to the IRS and to plan participants in January 2015.   (See our March 5, 2013 article on this topic.)  On July 2 the IRS and the White House issued a surprise  announcement delaying the effective date of these requirements until 2015, and also delaying the effective date of the employer shared responsibility (“play-or-pay”) penalties.  (See our July 2 and July 9 articles on this topic.)

Information Reporting by Large Employers.  Large employers (those with at least 50 full-time employees or “full-time equivalents”) will be required to file annual reports with the IRS on the terms and conditions of their health care coverage for full-time employees during the prior year. The IRS will use this information to verify employer-sponsored coverage and to administer the employer shared responsibility provisions under Code section 4980H(a) and (b). Employers also must furnish written statements by January 31 to each full-time employee whose information was reported to the IRS. (Code section 6056 and IRS Notice 2012-33)

Information Reporting by MEC Providers.   Additionally, entities that provide “minimum essential coverage” (insurance issuers, self-funded plan sponsors and government agencies that administer government-sponsored health insurance programs) will be required to file annual reports that provide information on each individual for whom they provide the coverage. It is anticipated that regulations will make insurance issuers responsible for the reporting for insured group health plans. (Code section 6055 and IRS Notice 2012-32)