IRS Releases Draft Forms for Reporting of Employee Health Coverage Under ACA

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By Michael Trimarchi  

Forms for the reporting of health coverage that employers offer to employees under the Affordable Care Act in 2014 were released July 24 as drafts by the Internal Revenue Service.

Reporting is voluntary for 2014, but for 2015 employers with at least 50 full-time equivalent employees are to use the forms to report whether coverage offered to employees meets minimum value and affordability standards.

Form 1095-B, Health Coverage, is used to collect information under Internal Revenue Code Section 6055, which under the ACA sets the standards for reporting information on whether plans meet minimum essential coverage. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, is required by Section 6056.

The IRS also released draft versions of two related forms, Form 1094-B, Transmittal of Health Coverage Information Returns, and 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.

The draft versions of the forms are to help employers, software providers and tax professionals to prepare for the new reporting provisions. The IRS plans to release draft instructions for the forms in August. Final versions of the forms and instructions are expected later this year, the agency said.

Filing Deadline Same as Schedule for Forms W-2, 1099

The reporting requirements fall under I.R.C. Sections 6055 and 6056 and are intended to aid the IRS in determining whether employers and individuals have met the compliance requirements of the ACA.

The filing deadline for the information reports is similar to that of Forms W-2, Wage and Tax Statement, and Forms 1099: Jan. 31 to employees and no later than Feb. 28 for filing with the IRS, or March 31 if filing electronically.

Employers choosing to provide only electronic copies to employees must separately obtain consent from workers, according to final rules (T.D. 9660, RIN 1545-BL33) released March 5 by the Treasury Department.

An alternative method of using Forms W-2 to report the information was not adopted in the final regulations.

Under the ACA, employers with at least 250 Forms W-2s in the previous year still are to report the cost of coverage under an employer-sponsored group health plan on an employee's W-2 in Box 12, using Code DD.

Employers that offer “highly affordable coverage” to full-time employees would benefit from the regulations that, according to a Treasury fact sheet, substantially streamline reporting requirements by omitting data elements in the statute, such as the length of waiting periods and employer's share of total allowed costs and benefits provided under a plan.

Comments on the draft forms can be made online at http://www.irs.gov/uac/Comment-on-Tax-Forms-and-Publications.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bna.com.