Starting in 2016, Section 6055 of the Internal Revenue Code (the “Code”), which was added by the Health Care Reform Act, requires all entities providing “minimum essential coverage” (“MEC”) to submit information to the IRS concerning each covered individual for the 2015 calendar year. Section 6055 also requires these entities to provide statements containing similar information to certain covered individuals. MEC is broadly defined to include any group health plan or group health insurance that is not an excepted benefit (e.g., stand-alone dental or vision plans). As noted, all entities providing MEC must comply with Section 6055. This includes, for example, all employers sponsoring self-insured group health plans, regardless of employer size. Self-insured employers must comply with Section 6055 reporting for all covered employees, regardless of employee status (e.g., part-time). For more information, please see our October 24, 2014 SW Benefits Update, “Section 6055 Reporting of Health Plan ‘Minimum Essential Coverage’ for Small and Large Employers.”
Additionally, starting in 2016, Section 6056 of the Code, which was also added by the Health Care Reform Act, requires applicable large employers to annually report to the IRS information regarding health coverage offered to full-time employees during the preceding calendar year. Such employers must also provide individual statements to each full-time employee regarding the type of coverage that was offered to that employee for the preceding calendar year. All applicable large employers must comply, regardless of whether the employer sponsors a self-insured or fully-insured health plan, or if the employer does not offer health coverage to its employees. For more information, please see our October 28, 2014 SW Benefits Update, “Section 6056 Reporting of Health Coverage Information for Large Employers.”
Despite the 2016 deadline, employers should gear up for these requirements soon. By January 1, 2015, many employers will need to start gathering and recording monthly health coverage information and employee data to ensure proper compliance. For example, most large employers will have to track and maintain information concerning each employee’s status (e.g., part-time or full-time), the employer’s monthly offer of coverage to each full-time employee, and each full-time employee’s share of the lowest cost monthly premium for self-only coverage. Self-insured employers will have to make reasonable efforts to obtain the Social Security number for each covered individual (i.e., employee and family members covered under a health plan). Generally, this requires an employer to make two attempts to request the Social Security numbers.