Health care reform reporting requirements: Final rules

by Thompson Coburn LLP

The Patient Protection and Affordable Care Act (PPACA) contains requirements for both individuals and employers related to health care coverage. In order to assure compliance with certain of these requirements, PPACA requires new information reporting to the IRS related to individual and employer group health coverage. In particular, one item the IRS requires is information to confirm that an individual has minimum essential coverage and is not subject to the Section 5000A of the Internal Revenue Code (the “Code”) individual responsibility payment. As well, the IRS is seeking information to help it determine if an “applicable large employer” is subject to one of the “pay or play” penalties under Section 4980H of the Code. To that end, on March 5, 2014, the IRS released final regulations governing information reporting under Sections 6055 and 6056 of the Code with respect to health plan coverage. Section 6055, and the regulations thereunder, provide guidance on reporting of minimum essential coverage information. Section 6056 requires an applicable large employer to provide information with respect to its compliance with the shared responsibility provisions of Section 4080H of the Code. This information will be used to help determine if such applicable large employer must pay penalties if a full-time employees receives subsidized coverage on an exchange. Both sections require information to be provided to covered individuals as well as to the IRS.

The final regulations under Sections 6055 and 6056 apply for calendar years after December 31, 2014. As such, to avoid penalties for failure to provide the return, the information will need to be provided to the IRS and the individual in early 2016 reflecting coverage information from 2015. However, the IRS is encouraging voluntary compliance for 2014 to help ensure that 2015 reporting runs smoothly.


Section 6055

As described above, Section 6055 requires an entity that provides coverage to an individual to report whether minimum essential coverage has been offered. Such reporting entities include payers (e.g., insurance companies) and self-insured employers. The information reported generally regards the type and period of coverage related to covered individuals and dependents.

If coverage is being provided via insurance, then the issuer is generally responsible for the Section 6055 reporting. Exceptions to this general rule include coverage being provided by certain government programs (like Medicare) and qualified individual coverage under the health care exchange (other than those individuals enrolled through the Small Business Health Options Program (SHOP)).

If coverage is being provided via a self-insured plan, the plan sponsor is generally responsible for Section 6055 reporting. Where multiple controlled group members participate in a single plan, Section 6055 looks to the rules under Section 6056, which generally require each adopting employer be responsible for reporting coverage for its own employees. Controlled group members may cooperate with each other by having a single member assist in filing returns and furnishing statements for all members of the group.

Reporting under Section 6055 can be outsourced to a third party. If the third party fails to properly report, the liability for failure to provide the information to the IRS or the individual remains with the reporting entity under the general rules.

Section 6056

Section 6056 requires information reporting by applicable large employers (at least 50 full-time or full-time equivalent employees) to the IRS and participants. This report is designed to help the IRS administer compliance with the employer shared responsibility provisions of Section 4980H of the Internal Revenue Code. In other words, the return is intended to disclose whether affordable care was offered and whether there is compliance with the employer responsibility provisions of the Act, or if a penalty might be assessed.

The final regulations confirm that the applicable large employers who may have an obligation to report under Section 6055 and 6056 are able to report the information required by both of those sections together on the Form 1095-C. Self-insured employers will complete the information for both Section 6056 and Section 6055. Fully insured applicable large employers will complete only the Section 6056 information on such Form. Other forms are available for reporting entities that are not the employer. As described above, each member of a controlled group is responsible for reporting about its own employees (since penalties under Section 4980H are generally calculated on a per member basis (even though, and this is important to remember, the large employer status is determined looking at the controlled group as a whole)).

Information to be reported

The information required to be reported under Sections 6055 and 6056 includes numerous items which providers and employers should be diligent about gathering during the year.
For Section 6055, the information includes, but is not limited to:

  • -- the name of each enrolled individual
  • -- the primary insured’s name and address 
  • -- the taxpayer identification number (TIN) and months of coverage for each individual covered (if TINs are not available after using reasonable efforts, birth dates may be used)

The preamble to the final regulations goes into depth about what a reasonable effort is for purposes of securing an individual’s TIN. A reporting entity will be considered acting reasonably if the person “properly solicits” the TIN but does not receive it. A proper solicitation by a reporting entity is described to include an initial solicitation at the time the relationship with the payee is established (generally, by no later than December 31st of the initial relationship year.) If the TIN is not provided, a second solicitation is required by the following December 31. If there is still no TIN, then the reporting entity does not need to try again. The rules do provide that if a reporting entity has the TIN through other channels (for example, as an employer) and uses that TIN for all relationships with the payee, then a separate solicitation is not required. Finally, if a new individual is added to the coverage (such as a child), a solicitation is required with respect to the new individual, but not with respect to an existing covered individual, even if no TIN has been provided for that existing individual.

The coverage information referenced in the third bullet above requires that the reporting entity provide each month for which an individual is enrolled in and entitled for at least one day to receive benefits under the coverage.

For purposes of the Section 6056 reporting, the information that must be gathered and reported includes, but is not limited to:

  • -- the name, address and EIN or the applicable large employer
  • -- a contact person with a telephone number
  • -- a certification as to whether full-time employees (and their dependents) were offered the opportunity to enroll in minimum essential coverage under an employer sponsored health plan, by calendar month
  • -- the number of full-time employees for each calendar month during the calendar year
  • -- for each full-time employee, the employee’s share
  • -- each full-time employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that full-time employee under an eligible employer-sponsored plan, by calendar month.

Employees are also required to be furnished statements. If electronic distribution of these statements to employees is contemplated, the applicable large employer must receive consent similar to the consent required to make electronic disclosure of W-2s. The consent must specifically identify the return in question. Consent to distribute an electronic W-2 is not sufficient to cover the Section 6056 return. This type of consent is beyond what is typical for electronic disclosure of more generic benefit information.

Alternative reporting method

Under the final rules, there are some simplified reporting methods that employers may be able to use for Section 6056 reporting including:

  • -- An applicable large employer may be able to certify that it made a “qualifying offer” of certain coverage to its employees and thus may use a simplified employee statement in lieu of the Form 1095-C to each full-time employee who received the qualifying offer for all twelve months of the year report.
  • -- For 2015, an applicable large employer may use an alternative method if it (1) has made a qualifying offer to 95% of its full-time employees and to their spouses and dependents and (2) in lieu of providing a Form 1095-C, satisfies its Section 6056 furnishing requirement by furnishing a required IRS developed statement to each of its full-time employees. It is anticipated that this statement may vary depending on an employee’s months of coverage, but if there has been 12 months of coverage it is expected to inform the parties (employee, spouse and dependents) that they are not eligible to receive a tax credit for any of the 12 months, among other information.
  • -- If an applicable large employer offers coverage to at least 98% of its full-time employees, than it can report without identifying or specifying the number of full time employees. Additional reporting of information under the general rules is still required for employees not offered coverage, if any.


The penalties related to this information reporting generally follow the IRS reporting and disclosure penalty scheme. As with other IRS returns, these penalties may be waived if due to reasonable cause. There is also additional relief for 2016 reports (covering 2015) if good faith efforts to comply can be demonstrated and the issue is either incorrect or incomplete information on the return or statement. Failure to timely file or attempt to comply in good faith means this relief will not be available.


Sections 6055 and 6056 require a significant amount of new information to be reported to the IRS and furnished to covered individuals. Large employers and others tasked with gathering and reporting this information should be preparing the systems now to help assure compliance. It may make sense to test the compliance with the voluntary 2014 reporting (in early 2015). Employers should start working with counsel and other service providers to be prepared for the actual roll out covering the 2015 information.

Reprinted with permission from Employee Benefit Review - May 2014

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Thompson Coburn LLP | Attorney Advertising

Written by:

Thompson Coburn LLP

Thompson Coburn LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.