IRS Reporting | Davevic Compliance Services - Davevic Benefit Consultants

IRS Reporting

As Healthcare reform continues to unfold, it continues to disclose new policies, procedures, and mandates that need to be enforced. As part of our promise to our clients, Davevic Benefit Consultants will continue to provide tools and resources essential to keeping your business compliant and knowledgeable about these new policies and mandates. If you have any further questions regarding new IRS Reporting guidelines, please contact us at [email protected].

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PCORI Fees

The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute fees (PCORI fees).

The PCORI fees apply for plan years ending on or after Oct. 1, 2012, but do not apply for plan years ending on or after Oct. 1, 2029. For calendar year plans, the fees will be effective for the 2012 through 2028 plan years.

Issuers and plan sponsors must pay PCORI fees annually on IRS Form 720 by July 31 of each year. The fee will generally cover plan years that end during the preceding calendar year.

*If you are not sure if the PCORI Fee will apply to you, please contact our office by sending an e-mail to [email protected].

Sections 6055 and 6056 Reporting Requirements

Section 6055 reporting
The first set of final regulations - Section 6055 reporting - applies to all entities providing MEC and requires them to report health care coverage information to the IRS, and provide a statement to all covered individuals. Entities subject to this requirement include health insurance issuers and sponsors of self-insured health care plans.

Section 6056 reporting
The second set of final regulations - Section 6056 reporting - applies to applicable large employers (ALEs), which are generally employers with 50 or more full-time and full-time equivalent employees. ALEs must report health care coverage information to the IRS and provide each full-time employee with a statement containing the same information as the IRS report.

Both reporting requirements are important because they function as key elements in administering the ACA's individual and employer mandates. Section 6055 reporting is needed for the individual mandate; Section 6056 for the employer mandate.

Reporting Penalties

Self-funded employers will be required to prepare an information return (Form 1095-B or 1095-C) for each applicable employee. These returns will be filed with the IRS using a single transmittal form (Form 1094-B or 1094-C).

Employers must file these returns annually by Feb. 28 (March 31 if filed electronically). Note that electronic filing is required if the employer files at least 250 returns.

A copy of Form 1095, or a substitute statement, must be given to the employee by Jan. 31 and can be provided electronically with the employee's consent. Employers will be subject to penalties of up to $260 per return for failing to file the returns in a timely manner or furnish statements to employees.