EUCLID MANAGERS®
has served the independent agent
since 1976, offering a portfolio
of group health, professional
liability, individual life, health,
annuity and long-term
care products.
We proudly represent many
fine carriers including
Group Products:
UnitedHealthcare of Illinois
Delta Dental of Illinois
MetLife
Concierge Services:
LifeLock
HealthiestYou
Individual Products:
American General Life Companies
AXA/Equitable
Banner Life
Delta Dental of Illinois
Genworth Financial Insurance Co.
Guarantee Trust Life
Humana Individual
John Hancock Life
Lincoln National Life
Prudential Financial
Transamerica
West Coast Life
…and many more!
Contact Information
234 Spring Lake Drive
Itasca, Illinois 60143
Phone: (630) 238-1900
Outside Chicagoland:
(800) 345-7868
Fax: (630) 773-8790
Visit us at:
www.euclidmanagers.com
Employer Reporting Requirements Under PPACA
The Patient Protection and Affordable Care Act commonly called PPACA
or the ACA, requires that most individuals in the United States have health
insurance. Similarly, many employers are required to offer health insurance
coverage to their employees or face a penalty. Recently released final regulations
outline the reporting mechanisms that will be necessary to enforce these
obligations.
This issue of Reflections focuses on the reporting requirements for insurers
and employers that will implement – or assist in implementation – of these
provisions.
continued on page 2
A letter from Karen Knippen
Piece by piece we are building the compliance structure of the ACA. We’ve
seen the initial build out of the exchange – with the back end of the exchange
still under construction. With the reporting rules, we’re building more of
the infrastructure needed to support the mandate provisions of the law.
We’ve already seen the changes to the individual and small group markets
– or at least early stages of the changes. This year will give us a better
picture of how the newly re-structured insurance market will look as well
as a better understanding of how well it will function.
As always, Euclid Managers is here to help you understand the changes in
the market as well as providing you with the insurance products your
clients want – and need.
Sincerely yours,
Karen Knippen, RHU, REBC, CLTC
EUCLID MANAGERS® has been serving the independent agent since 1976 with a portfolio of group health, professional
liability and individual life and health, annuity and long-term care products. We proudly represent UnitedHealthcare,
Delta Dental of Illinois, MetLife and Humana Individual. We encourage your feedback and suggestions. Please call
your EUCLID MANAGERS® Marketing Representative or Marcy Graefen at (630) 238-2915 for more information. Outside
Chicagoland, call (800) 345-7868. Website: www.euclidmanagers.com
Reporting Provisions
The ACA establishes three (3) information reporting
provisions for employers and insurers. These are:
• The requirement for employers to report the
aggregate cost of employer-sponsored health care
on Form W-2
• The requirement that self-funded employers,
governmental units and insurers provide
information to individuals regarding their
coverage so that the Internal Revenue Service
(IRS) can administer the individual mandate
• The requirement that large employers with 50 or
more full-time equivalent employees report to the
IRS information necessary to administer the
employer mandate.
Form W-2
Reporting on the Form W-2 was mandated by section
6051 of the law and began for the 2012 tax year;
distributed to employees in 2013. This requirement
only applies, currently, to employers who file 250 or
more Forms W-2. Employers are required to report the
cost of coverage which includes both the employee
and the employer contributions.
Some employers and pundits have feared that this
reporting mechanism is a precursor to taxing employerprovided health benefits. At this time, there is nothing
to support these concerns.
Section 6055: Key to Enforcement
of the Individual Mandate
Section 6055 reporting is key to enforcement of the
individual mandate. Employers with self-funded plans
and insurers are required to report to the IRS and to
individuals that a person has minimum essential health
coverage.
Of note, insurers of qualified health plans (QHPs) on an
exchange are not required to file section 6055 returns.
-2-
Reflections
The exchange must report this information. A wrinkle
in this provision requires insurers to report on individuals
enrolled in QHPs through the SHOP exchange.
Self-funded employers are required to file on behalf
of those individuals enrolled in their plans. Employers
that are part of a controlled group will not file as a
controlled group. Rather each entity will file its own
return.
The 6055 return will require, at a minimum, the
following information for each individual covered
under the plan:
• Name
• Address
• Taxpayer Identification Number (TIN) also called
the Social Security Number (SSN)
• Months for which individuals were covered.
Reporting entities will not be penalized if they are
unable to provide a TIN for an individual if they have
made a good faith effort to procure it. In the absence
of a TIN, the enrollee’s date of birth must be included
in the information reported.
The growing threat of identity theft is also recognized
by the provision that allows the reporting entities to
partially mask the TIN of statement recipients. The
statement to individuals may be provided electronically
but only to those individuals who have consented to
receive the statements in this manner.
Other notable provisions include:
• Statements must be filed annually with the IRS by
March 31 if filing electronically or February 28 for
other methods
• The annual filing will be for the year immediately
preceding the filing deadline
• Statements to individuals must be furnished
annually by January 31 in order to enable
individuals to have the information necessary to
file their annual income tax returns
• The 6055 employee statement may be mailed with
the Form W-2
• Entities that file at least 250 returns must report
the information to the IRS electronically.
Section 6056: Key to Enforcement
of the Employer Mandate
Section 6056 reporting is required by employers with
50 or more full-time equivalent employees. The final
rules for information reporting by large employers
do not deviate significantly from the proposed rules
that were published in September 2013. The final
rules allow for simplified reporting in very specific
circumstances that many employers will be unable –
or unwilling – to meet.
• The name, address and TIN of each full-time
employee during the calendar year and the
months, if any, the employee was covered under
an eligible employer-sponsor plan.
Employers also must submit a section 6056 statement
to each full-time employee. This statement will be on
Form 1095-C and will include:
• Name, address and employer identification number
of the employer
• The information filed with the IRS with respect to
the employee.
The same filing schedule used for Forms W-2 and
section 6055 applies to section 6056 reporting.
One of the requirements of Section 6056 reporting is a
statement to all full-time employees with information
about the offer of coverage – whether or not the
employee enrolled. The report is filed annually but the
information is reported on a monthly basis. This
reporting is integral to enforcement of the employer
responsibility requirements and is also necessary to
administer the premium tax credits for individuals
purchasing coverage in the exchange.
Employers with 50 – 99 FTEs who are eligible for
transition relief will not face penalties in 2015. As
such, employers that qualify for this transition relief
will still be required to file section 6056 transmittal
forms certifying that they met the transition relief
requirements.
The 6056 return that is submitted to the IRS requires,
at a minimum, the following information:
• Name, address and employer identification number
of the employer
• Name and telephone number of the employer’s
contact person
• A certification of whether the employer offered to
its full-time employees and their dependents the
opportunity to enroll in minimum essential
coverage, by calendar month
• The number of the employer’s full-time employees
for each month during the calendar year
• The months for which minimum essential coverage
was available for each full-time employee
• The employee’s share of the lowest-cost monthly
premium for self-only coverage providing minimum
value that was offered to an employee, by calendar
month
The fine for failure to file a return is $100 per return
up to $1.5 million. Fines can be reduced if an employer
takes steps to correct any filing deficiencies within
30 days of the due date. Penalties can be waived for
reasonable cause.
Penalties for Failure to File
Summary
There are alternative reporting options that the final
regulations offer to employers by way of simplifying
the reporting required. For the most part, these simplified
methods require more expansive offers of coverage
than would otherwise be required of an employer.
The requisite forms for filing are not yet available to
employers. They are expected to be produced shortly.
Employers may elect to report for 2014 as a test period.
Returns for 2014 would be due in 2015.
Reflections
-3-
A service publication for brokers from
Euclid Managers®, proudly representing
UnitedHealthcare of Illinois, Delta Dental of Illinois,
MetLife and Humana Individual.
HealthiestYou and Lifelock available through Euclid Managers Concierge Services.
Visit us online www.euclidmanagers.com.
Legislative Review is published by Euclid Managers®, 234 Spring Lake Drive., Itasca, IL 60143. For more information, contact your Marketing Representative or Marcy Graefen
at (630) 238-2915 or fax your request to (630) 773-8790. Outside Chicagoland: (800) 345-7868, Fax (877) 444-2250. © Permission to quote with credit to source.
Employer Reporting Requirements
Under PPACA
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