EMPLOYER REPORTING AND ADMINISTRATIVE RESPONSIBILITIES
Federal requirements to help administer health reform laws
Note: On November 18, 2016, the IRS announced extended deadlines for certain 2016 Minimum Essential Coverage (Section 6055) and Large Employer Shared Responsibility (Section 6056) reporting required to be completed in early 2017. Specifically, 1095 Forms sent to individuals are now due by March 2, 2017. Please see our news alert for more details.
The health care reform legislation imposes several administrative responsibilities upon employers, which are tied to information reporting and streamlining electronic transactions around group health insurance. These responsibilities are multi-faceted and help in the administration of many health reform laws. Some of the rules impact employers differently based on how their group plans are funded or insured. Employers should become familiar with each:
- Large Employer Reporting
- Minimum Essential Coverage Reporting
- Health Plan Identifier (HPID)
- Form W-2 Reporting
- Notice of Coverage Options
Large Employer Reporting
Employers with 50 or more full-time employees and/or full-time equivalents must provide the Internal Revenue Service (IRS) and their employees information about the coverage offered during any given calendar year. See the reporting deadlines in the "Forms and Instructions" section below. The information will confirm the employer’s compliance with the “employer mandate,” including:
- Whether the employer offered all full-time employees and their dependents the opportunity to enroll in “minimum essential coverage” (MEC), and
- Each full-time employee’s required contribution to the cost of the lowest cost plan that provides “minimum value.”
The IRS reporting forms will identify the specific data required to be reported. Examples of data required to be reported include:
- Employer contact and tax information, including a contact person’s name and phone number
- Certification that full-time employees (FTE) and dependents were offered an opportunity to enroll in MEC, by calendar month
- Number of FTEs for each month, and months for which MEC was available for each FTE
- Each FTE’s share of lowest cost monthly premium for self-only coverage of minimum value standards, by calendar month
- Name address and Social Security Number (SSN)/Tax Identification Number (TIN) for each FTE, and each month of coverage
Links to the final 2016 forms and instructions employers will use to report health coverage are in the "Forms and Instructions" section below.
To support our self-funded clients with these reporting requirements, the Cigna ASO PPACA Fees and Reporting Resources team is available via phone or email to support questions from sales, brokers, and clients on Large Employer reporting requirements.
Minimum Essential Coverage Reporting
Insurers and employers who self-insure their group health plans must provide the IRS and covered individuals with information about minimum essential coverage (MEC). This information will confirm each person’s enrollment for each month of coverage as required by the individual mandate. This reporting requirement applies to all size employer plans. See the reporting deadlines in the "Forms and Instructions" section below.
There is specific data required in the IRS reporting. Using the IRS forms will best ensure insurers and employers are providing all the required data. Some specific examples required in reporting include:
- Name, address, and EIN of reporting entity
- Name address and SSN/TIN of each responsible individual
- Name and SSN of each covered individual
- Months of coverage during calendar year
For insured group health plans, name, address, and EIN of employer sponsoring plan and whether the coverage is a QHP enrolled in through the SHOP and the SHOP’s unique identifier
Links to the final 2016 forms and instructions are in the "Forms and Instructions" section below.
To support our self-funded clients with these reporting requirements, the Cigna ASO PPACA Fees and Reporting Resources team is available via phone or email to support questions from sales, brokers, and clients on Minimum Essential Coverage reporting requirements.
Forms and Instructions for Large Employer and Minimum Essential Coverage Reporting
2016 Filing Deadlines
Forms Sent to Individuals
Forms Filed with the IRS
Forms 1094-B and 1095-B
Forms 1094-C and 1095-C
2/28/2017 – paper
3/31/2017 – electronic
Federal Forms and Instructions
Instructions for Forms 1094-C and 1095-C
("Applicable large employers" (i.e., those subject to the employer mandate), self-insured plans complete the entire Form 1095-C)
Form 1095-C to both the IRS and individuals
(If its plan is insured, the applicable large employer will only complete Parts I and II of Form 1095-C)
Instructions for Forms 1094-B and 1095-B
(Insurance carriers and small employers with self-insured plans use these forms)
Other Federal Resources
Final Publication 5164 Test Package for ACA Information Return (AIR) Returns
(Technical/system testing required for the use of the AIR system)
Final Publication 5165 Guide for Electronically Filing Affordable Care Act (ACA) Information Returns for Software Developers and Transmitters
(Insurers and employers filing 250 or more 1095 Forms are required to file electronically)
Health Plan Identifier (HPID) - Delayed
The Department of Health and Human Services (HHS) requires all health plans to obtain a ten-digit “unique identifier” from a government sponsored agency. The Health Plan Identifier (HPID) is intended to streamline electronic transactions between carriers, administrators, health care professionals, and financial institutions.
The law requires self-funded employers or group health plans to obtain their own HPIDs. Fully insured plans do not need to do anything to comply with this regulation as the insuring company will have its own identifier.
The original key compliance dates are delayed until further notice:
- Health plans with annual receipts of $5 million or more must obtain HPIDs by November 5, 2014.
- Small health plans, or those with annual receipts of $5 million or less, must obtain HPIDs by November 5, 2015.
- All plans that generate the electronic transactions are required to use the identifier in those transactions beginning November 7, 2016.
Self-funded health plans can apply for an HPID through the Centers for Medicare and Medicaid Services (CMS) website. The online application is available through the Health Plan and Other Entity Enumeration System (HPOES) housed within CMS’ Health Insurance Oversight System and may be accessed through the CMS Enterprise Portal.
Form W-2 Reporting
Employers who distribute 250 or more* Form W-2s for any tax year need to include the value of applicable employer-sponsored coverage on each employee's W-2 Form. This is not considered taxable income and is for information purposes only. Employee premiums may still be made on a pre-tax basis.
IRS Notice released October 12, 2010, made this reporting requirement for the 2011 tax-year voluntary. Employers that choose not to report the aggregate cost of employer-sponsored coverage for the 2012 tax year and beyond will be subject to tax penalties. While the Form W-2 has not changed, the IRS added a code "DD" that employers should put in box 12 to report the value.
See the IRS sample W-2 form
* It is important to note that this requirement applies to employers who distribute 250 or more W-2s, not simply to employers with 250 or more employees. A high-turnover employer with 200 employees may send out more than 250 W-2s, and would consequently need to include this information.
Notice of Coverage Options
To help support administration of Marketplace coverage, employers, with more than 50 full-time employees must provide a one-time Notice of Coverage Options to all employees – even part time employees and regardless of whether or not coverage is offered. This notice helps build awareness of Health Insurance Marketplaces and any applicable employer-sponsored health coverage.
Employers were asked to send a single statement to all current employees by October 1, 2013. Then employers should make this notice a part of their new-hire process.
Links to respective Department of Labor sample notices in English and Spanish:
Other responsibilities of Employers
EMPLOYER MANDATE IN REFORM
Businesses must offer affordable medical insurance that provides “minimum value” to employees and their dependents.
FEES AND TAXES
New fees and taxes will generate revenue to help fund expanded programs. Employers will pay some fees while others will be paid by insurers and individuals.
ESSENTIAL HEALTH BENEFITS
These new standards are required for individual and small group plans and may also affect large group plans.
SUMMARY OF BENEFITS AND COVERAGE
Health insurers and self-insured group health plans are required to provide this standard benefits and coverage document.
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