By Dean Spina
On March 5, 2014, the IRS released final rules implementing Section 6056 of the Internal Revenue Code. Section 6056 was added by the Affordable Care Act.
Section 6056 requires employers subject to the Play or Pay mandate (also known as Employer Shared Responsibility) to report to the IRS certain information to enable the IRS to determine the amount of assessable payments (i.e., tax), if any, that an employer has to pay.
The final Play or Pay reporting rules will enable "applicable large employers" to determine the information that must be gathered for each month and reported to the IRS.
The first Section 6056 report will be due in early 2016 for the 2015 calendar year. Employers will need to implement data collection systems by the end of 2014, to be able to report the employer's Play or Pay activity for all of 2015.
The Play or Pay mandate requires employers of 50 or more full-time and full-time equivalent employees ("applicable large employers") to offer minimum essential health coverage to all full-time employees or be subject to one of two taxes. Full-time is defined as providing an average of 30 or more hours of service per week.
In final rules issued on February 10, 2014, the IRS provided one year of relief for "applicable large employers" that have 50 – 99 FT/FTE employees. Employers in this size category do not generally have to comply with Play or Pay until the 2016 calendar year.
Employers with 100 or more FT/FTE employees are subject to Play or Pay reporting for all of 2015.
In a move designed to streamline and simplify information reporting, certain information is excluded from the reporting obligation although the statute specified the information was to be reported. Large employers will not need to report the length of any waiting period, the employer's share of the total allowed costs of benefits and the amount of advance payments of the premium tax credit and cost-sharing reductions.
More information on the Play or Pay reporting requirement will be provided at a later time.
Minimum Essential Coverage Reporting Rules Released
On March 5, 2014, the IRS released final rules implementing Section 6055 of the Internal Revenue Code. Section 6055 was added by the Affordable Care Act.
Section 6055 requires health plans providing Minimum Essential Coverage to report to the IRS certain information. The obligation for reporting is primarily the responsibility of insurance companies. However, the obligation extends to employers providing coverage under self-insured group health plans.
The first Section 6055 report will be due in early 2016 for the 2015 calendar year. The report is due February 28 (March 31 if filed electronically).
More information on the Minimum Essential Coverage reporting requirement will be provided at a later time.
If you would like a copy of the final Play or Pay or Minimum Essential Coverage reporting rules, please contact Dean Spina.