IRS Publishes Updated Q&As on PPACA Reporting and Employer Mandate

On Dec. 29, 2016, and Jan. 4, 2017, the IRS issued a set of revised questions and answers (Q&As) providing additional guidance on employer compliance with PPACA reporting requirements under IRC Sections 6055 and 6056. Additionally, on Jan. 5, 2017, the IRS issued updated Q&As providing additional guidance on reporting using Forms 1094-C and 1095-C for calendar year 2016 that are to be filed in 2017, and on the employer mandate.

As background, Section 6055 is meant to assist the government in enforcing the individual mandate (reports on coverage at the individual level). Section 6056 is meant to assist the government in enforcing the employer mandate (reports on the employer’s coverage at the employer level) and advance premium tax credit (APTC) eligibility (reports whether a specific individual was offered minimum value, affordable employer sponsored coverage for each month, which affects that individual’s ability to qualify for an APTC).

To fulfill the Section 6056 requirement, Form 1095-C is to be used by applicable large employers (ALEs) (those employers with 50 or more full-time employees including full-time equivalent employees in the preceding calendar year). Form 1094-C is to be used for transmitting Form 1095-C. Self-insured ALEs will combine Sections 6055 and 6056 reporting on Form 1095-C.

The Section 6055 Q&As address the basics of employer reporting, including which entities are required to report, what information must be reported and how and when reporting entities must report required information. The Section 6056 Q&As cover the same topics and also address questions related to the methods of reporting. The Sections 6055 and 6056 Q&As have been revised to include changes related to the due dates for the forms, hiring of third party service providers and other relevant updates for reporting on calendar year 2016. The Section 6056 Q&As now include Q&As on reporting for governmental entities.

On Jan. 5, 2017, the IRS also issued updated Q&As providing additional guidance on reporting using Forms 1094-C and 1095-C for calendar year 2016 that are to be filed in 2017.

In discussing the basics of reporting, the IRS addresses the forms that must be used and the employees that must be reported on, as well as the information that must be provided to those employees.

In the section on reporting offers of coverage, the IRS details which lines on the forms should be used to reflect an offer of coverage in addition to giving guidance on which lines should be used to reflect employees who have been hired or terminated during the year. They also address how an employer will complete their authoritative transmittal if they are eligible for one of the alternative reporting methods.

The IRS also answers questions on how a governmental unit that has been designated to report on behalf of other governmental units will complete the Forms 1094-C and 1095-C.

The last section of Q&As confirms information on reporting offers of COBRA coverage, including specific information on various scenarios where COBRA is offered.

Importantly, each section provides helpful guidance on what reporting actions an ALE member is required to take. Remember, the definition of an ALE member in the regulations states that “if a person, together with one or more other persons, is treated as a single employer that is an ALE on any day of a calendar month, that person is an ALE member for that calendar month.”

Finally, on that same day (Jan. 5, 2017), the IRS issued the following updated Q&As on the employer mandate:

  • Basics of the Employer Shared Responsibility Provisions (Questions 1-4);
  • Employers Subject to the Employer Shared Responsibility Provisions (Questions 5-17);
  • Identification of Full-Time Employees (Questions 18-27);
  • Offers of Coverage (Questions 28-37);
  • Affordability and Minimum Value (Questions 38-41);
  • Liability for the Employer Shared Responsibility Payment (Questions 42-51);
  • Calculation of the Employer Shared Responsibility Payment (Questions 52-54);
  • Making an Employer Shared Responsibility Payment (Questions 55-58);
  • Limited Transition Relief in 2016 (Questions 59-63);
  • Related Provisions (Questions 64-66).

These Q&As provide general guidance about the employer shared responsibility provisions, limited transition relief in 2016, calculation of the employer mandate penalty payment and making an employer mandate penalty payment.

Since the reporting forms are due in early 2017, employers should be tracking information now and preparing to complete the forms. NFP has resources to assist. Ask your advisor for more information.

Q&As on Reporting of Offers of Coverage by Employers (Section 6056) »
Q&As on Information Reporting by Health Care Providers (Section 6055) »
Q&As on Forms 1094-C and 1095-C »
Q&As on Employer Mandate »