IRS Reporting Summary (Internal Revenue Code Sections 6055 and 6056)
In 2016, Internal Revenue Code Sections 6055 (individual shared responsibility) and 6056 (the employer mandate) will take effect as part of the Affordable Care Act (ACA).
To comply with the new requirements, all health insurance carriers are required by law to obtain Social Security numbers for their fully insured members, as well as covered spouses and dependents, and report this information to the Internal Revenue Service (IRS). Self-funded groups are responsible for obtaining and reporting this information themselves.
Here is a summary of the new requirements.
Individual Shared Responsibility (Section 6055): Also referred to as the individual mandate, the individual shared responsibility provision requires that everyone in the United States has minimum essential coverage or qualify for an exemption. Under Section 6055, health insurance carriers are required to complete and send forms to the IRS on behalf of their fully insured customers.
Note: The requirement will not apply to individual members who enrolled through the Health Insurance Marketplace (exchange).
Employer Mandate (Section 6056): Often referred to as the “pay or play” rule, the employer mandate requires that certain employers offer minimum value, affordable health coverage to their full-time workers or face a penalty. The mandate will only apply to “applicable large employers,” which are those with 50 or more full-time employees (including full-time equivalents).
The following grid offers a high-level overview of reporting responsibilities, sorted by business segment:
By: Medical Mutual C1858-COR