Reporting Requirements for Applicable Large Employers: Section 6055 and 6056

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The Affordable Care Act added Section 6055 and 6056 which requires Applicable Large Employers (ALEs) to file returns with the IRS and provide statements to their full-time employees regarding the health insurance coverage offered by the employer.  For calendar year 2015, ALE must file the Section 6055 and 6056 returns on or before February 29 (March 31, if filed electronically) of 2016.  A statement to all full-time employees must be furnished by January 31 of each year following the calendar year.

  •  Section 6055 requires health insurers, certain employers, and others that provide Minimum Essential Coverage to individuals must report to the IRS information about the type and period of coverage, and must furnish the information in statements to covered individuals.
  • Section 6056 requires employers with 50+ FTE to report to the IRS information about the health coverage, if any, they offered to FT employees. Section 6056 also requires employers to furnish related statements to employees.

 

Who is an Applicable Large Employer?

  • An employer with 50 or more full-time equivalent (FTE) employees on average of business days during the preceding calendar year.

–Full-time employees: Employees working 30 or more hours per week.

–Part-time employees FTE calculation: Add all the hours worked per month by PT employees, but not more than 120 hours per employee, and divide by 120.

  • NOTE: Aggregation (control group) rules apply
  • NOTE: Reporting obligations are the responsibility of each ALE group, and you must disclose if you are part of a control group and identify the other group/members.

 

Penalties for non-compliance:

  • $100 for failure with IRS ($1.5M maximum)
  • $100 for failure to provide statement to employees ($1.5M maximum)
  • Example: Employer fails to report a FT employee and does not provide a statement to the employee: $200 penalty.
  • Penalty relief is available for 2015 if an employer can show good faith efforts to comply

 

These reporting requirements can be overwhelming for many employers.  We have solutions and resources for these services that we can provide you, as your Trusted Advisor and Broker of Record.  Please contact MNJ Insurance Solutions for more information at (714) 716-4303.

 

Other Resources:

Questions and Answers on Information Reporting by Health Coverage Providers (Section 6055) – IRS website

Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers (Section 6056) – IRS website

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.