The Affordable Care Act (ACA) created a number of federal reporting requirements for employers and health plans. One such reporting requirement is Section 6056 reporting.
Under Internal Revenue Code Section 6056, applicable large employers (ALEs – in general, employer with 50 or more full-time equivalent employees) subject to the ACA’s employer shared responsibility provisions must file a return with the IRS that reports the terms and conditions of the health care coverage provided to their full-time employees for the calendar year. In addition, related statements must also be provided to employees. This reporting requirement is whether or not you offer employer-sponsored group health coverage.
The IRS will use the information that ALEs report to verify employer-sponsored coverage and administer the employer shared responsibility provisions. These shared responsibility provisions impose penalties on ALEs that do not offer affordable, minimum value coverage to their full-time employees and dependents.
The final regulations for this reporting apply for calendar year plans beginning after December 31, 2014 – meaning Section 6056 returns must be filed by the employer to the IRS annually, no later than February 28th (March 31st if filed electronically) of the year immediately following the calendar year to which the return relates. In simplified terms, the first Section 6056 returns required to be filed are for the 2015 calendar year, and must be filed no later than February 29, 2016 (as February 28, 2016 is a Sunday), or March 31, 2016, if filed electronically (required for ALEs filing at least 250 returns under Section 6056 during the calendar year).
An associated employee statement is also required advising employees of the information shared in the Section 6056 reporting. The Section 6056 employee statements must be furnished annually to full-time employees on or before January 31st of the year immediately following the calendar year to which the employee statements relate. This means the first Section 6056 employee statement (for 2015) must be furnished no later than February 1, 2016 (as January 31, 2016 is a Sunday).
ALEs need to track a significant amount of information during 2015 in order to be prepared to file this reporting in 2016. If you are an ALE and haven’t started preparation – do so ASAP!
Remember to keep health care reform compliance focused on your radar. If WA can be of further assistance to you, please feel free to contact us.