Understanding the Reporting Requirements of the Health Care LawPosted on: May 18, 2015Categories: HR & Compliance
Under the Affordable Care Act, any entity that provides minimum essential coverage to individuals must report that coverage to the IRS and give the covered individuals information about the coverage to help them when filing their federal tax return.
This requirement affects:
- Health insurance issuers or carriers,
- The executive department or agency of agovernmental unit providing coverage under agovernment-sponsored program,
- Plan sponsors of self-insured group health plancoverage, and
- Sponsors of coverage that the Department of Healthand Human Services has designated as minimumessential coverage.
How to Report: Form 1095-B
- File a Form 1095-B with the IRS, accompaniedby a Form 1094-B transmittal. Filers of more than250 Forms 1095-B must e-file. The IRS allowsand encourages entities with fewer than 250forms to e-file.
- Furnish a copy of the 1095-B to the responsibleindividual (generally the primary insured, employee, parent or uniformed services sponsor). You mayelectronically furnish the Form 1095-B with theindividual’s express, informed consent.
What information is reported?
- Name and taxpayer identification number of everycovered individual. A date of birth may be enteredif no TIN is available.
- Name and other information about the responsible individual. No TIN is required if the responsibleindividual is not covered.
- Months of coverage, including any month forwhich an individual is enrolled in MEC for at leastone day.
- If the reporting is for insured employer-sponsoredcoverage, information about the employer, including the employer identification number, and uniqueSmall Business Health Options Program identifier,if applicable. (SHOP identifier is not reported for2014 coverage.)
Form 1095-B’s sections
- Part I, Responsible Individual, is completed by all.
- Part II, Employer Sponsored Coverage, is completed only by an insurance company for a group healthinsurance plan. This section reports informationabout the employer that sponsored the coverage.
- Part III, Issuer or Other Provider, is for the provider of the coverage (insurance company, self-insuredemployer or government agency).
- Part IV, Covered Individuals, reports the name, TIN and coverage months for each covered individual.
The general rule is that whoever provides the minimum essential coverage is responsible for reporting. However, there are exceptions, which reduce the reporting burden on entities that must report coverage of enrolled individuals through a different section of ACA.
These exceptions include:
- Individual market qualified health plans enrolled in through the Marketplace – the Marketplace must report on this coverage rather than the provider.
- Supplemental coverage to other MEC, if the same entity provides both primary and supplemental coverage.
- Supplements to government-sponsored coverage, like Medicare.
Who is the MEC provider?
The MEC provider varies for different types of MEC.
All insured coverage: MEC provider is the issuer or carrier providing the coverage (i.e., the insurance company) except for:
- Qualified health plans, as noted above
- Government sponsored programs such as Medicaid and Medicare Advantage that provide coverage through an issuer
Government-sponsored coverage: The provider is the government agency providing the coverage.
- For Medicare (including insured Medicare under Part C, which is also known as Medicare Advantage), the Medicare office reports.
- For Medicaid and CHIP, the state agencies administering the program must report.
Miscellaneous MEC: In general, the entity sponsoring the coverage does the reporting.
Self-insured employer-sponsored coverage:
For self-insured employer sponsored coverage, the MEC provider is the plan sponsor, regardless of the size of the employer.
The plan sponsor is:
- For self-insured plans covering only employees of a single employer, the employer.
- For self-insured plans covering employees of more than one employer, each employer for its own employees.
- For multiemployer (union) plans, the committee, association, board of trustees, or similar group maintaining the plan.
- For multiple employer welfare arrangements, each participating employer for its own employees.
Government employers: Government employers may designate another governmental unit to report for the government employer. The designee must be related to or part of the government employer.