The Internal Revenue Service has finally issued your assignment on health reform, although it is still in the preliminary stage.

A woman is talking on the phone at her desk, although it is still in the preliminary stage.
 

Employers are finally gaining a comprehensive understanding of the obligations they must fulfill to adhere to the employer “play-or-pay” provision, over four years following the enactment of the Affordable Care Act.

For a long time, the Internal Revenue Service (IRS) has been slowly providing information about the reporting obligations that are necessary for effectively enforcing the employer mandate.

During the previous winter, the IRS made an effort to outline the two categories of reporting that are mandatory.

  • Tax Code 6055 reporting. This applies to insurers and sponsors of self-insured plans. What must be reported? Data about the entity providing insurance coverage — like the contact information for the company — and which individuals are enrolled in coverage, with identifying information and the months for which they were covered.
  • Tax Code 6056 reporting. This applies to employers subject to the play-or-pay rules (employers with 50 or more full-time employees). What must be reported? Data about the organization — like the contact information for the company and the number of its full-time equivalent employees — and information about the coverage (if any) offered to each full-time employee, by month, including the lowest employee cost of self-only coverage offered.

Regrettably for employers and insurers, the necessary forms for completing the reporting were not provided alongside these requirements. Consequently, there was a lack of clarity regarding the specific information that would be required from them. Well, the IRS just released the draft reporting forms:

The reporting requirements under Tax Code 6055 will be met by utilizing Form 1095-B, while Form 1094-B will be employed to transmit the 1095-B.

To meet the 6056 reporting obligations, Form 1095-C will be utilized, while Form 1094-C will be employed to transmit the 1095-C.

There´s More to come

However, upholding their customary practices, the IRS has not yet provided the complete information. Even though the preliminary forms have been made available, guidance on completing them is still pending.

The IRS has announced that they will furnish the instructions in August. Keep yourself updated.

Frequently Asked Questions

What are the two mandatory reporting categories outlined by the IRS?

The two mandatory reporting categories outlined by the IRS are Tax Code 6055 reporting, which applies to insurers and sponsors of self-insured plans, and Tax Code 6056 reporting, which applies to employers subject to the play-or-pay rules, i.e., employers with 50 or more full-time employees.

What are the forms released by the IRS for meeting the reporting requirements under Tax Code 6055 and 6056?

The IRS released draft reporting forms for meeting the reporting requirements:
For Tax Code 6055, the reporting requirements will be met by utilizing Form 1095-B, while Form 1094-B will be employed to transmit the 1095-B.
For Tax Code 6056, the reporting obligations will be met using Form 1095-C, while Form 1094-C will be employed to transmit the 1095-C.

When has the IRS announced they will provide the instructions for completing the preliminary forms?

The IRS has announced that they will furnish the instructions for completing the preliminary forms in August.

What specific information needs to be reported under Tax Code 6055?

Under Tax Code 6055, the entity providing insurance coverage must report data about themselves, like the contact information for the company, and which individuals are enrolled in coverage, with identifying information and the months for which they were covered.

What specific information needs to be reported under Tax Code 6056?

Under Tax Code 6056, employers must report data about the organization, like the contact information for the company and the number of its full-time equivalent employees, and information about the coverage (if any) offered to each full-time employee, by month, including the lowest employee cost of self-only coverage offered.

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