Deadlines for ACA reporting for plan year 2022 health coverage (generated in the 2023 tax year) are swiftly approaching. The IRS has released final forms for 1094-B and 1095-B. However, the IRS has yet to announce the final instructions for Form 1094-B/1095-B (see table below).
|Instructions for Forms 1094-B and 1095-B (Draft)||Form 1094-B|
In anticipation of final IRS confirmation, here are a few things you should note:
Who Is Required to Report?
1094-B and 1095-B: These forms are used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals. Note: Self-insuring employers with less than 50 full-time or full-time equivalent employees will use these forms to report information on coverage to the IRS and to covered individuals.
What Are the Deadlines?
The deadlines are as follows:
Deadline for Furnishing Statements to Individuals
The deadline for furnishing Forms 1095-B to individuals has been automatically extended from January 31, 2023, to March 2, 2023. Thus, no additional extensions will be granted.
No Extension for Filing Returns with the IRS
The automatic extension does not apply to filings with the IRS. The deadlines will be:
February 28, 2023, for paper filings
March 31, 2023, for electronic filings
Filers may extend these deadlines by application to the IRS. Any employer who would like to file electronically should refer to the IRS for more information on the AIR Program, which requires at least 30 days for testing for first-time users.
What Are the Requirements for Small Employers?
As for Small Employers, the ACA requires self-funded employers to satisfy two reporting obligations under Sections 6055 and 6056 of the Internal Revenue Code. The reporting relates to health coverage offered to employees, and about those employees who are covered under the plan. Smaller employers with fewer than 50 full-time equivalent employees are only required to meet one of those obligations, the Minimum Essential Coverage reporting under Section 6055. MedCost will provide a report of the health plan-related data that is contained in MedCost’s systems to all MedCost Benefit Services clients at no charge.
Section 6055 Reporting Compliance
Under Section 6055 of the Internal Revenue Code, all self-funded employers must annually report information to the IRS and to any employees who are covered under a health plan offered by the employer. The following data must be reported to the IRS:
The name and address of each covered employee;
The tax ID (social security number) for each covered individual (including dependents);
The months that each covered individual was covered under the plan; and
The employer’s name, address, and tax ID number.
This same information must be reported to employees, along with basic contact information for the employer. The IRS has created Forms 1094-B and 1095-B (the “B Forms”) for purposes of allowing small employers to meet this requirement.
Currently, many employers do not have access to the social security numbers (SSNs) for non-employed dependents, creating a fairly significant compliance burden to collect that data. The regulations require that employers exercise “reasonable collection efforts” to obtain that information. (Typically, an employer will satisfy that standard by documenting at least two efforts to request the data from those individuals.)
How Will MedCost Assist Clients?
MedCost is generating reports for our clients that will be available as early as the week of December 19, 2022. Reports will be posted to the secure Employers portal of our website. Details on how to use the reports and the report contents will be discussed in a future communication.
For small employers, this report will contain nearly all of the information needed to complete the necessary forms. In addition to supplying this report, MedCost is offering form preparation services for a small fee to our small employer clients. Through this service, MedCost will prepare the B Forms for your covered employees and the IRS, and securely transmit an electronic version of the Forms for review by February 2023 to the person you identify as the primary benefits (HR) contact. The fee for this service is $500, which will be billed at the time the draft forms are provided to you. If you are interested in having MedCost provide form preparation services, you must submit the completed Request Form to [email protected] by December 30, 2022.
Note: This service will not include filing or delivery of any forms to the IRS or to individuals. Additional information is included on the Request Form.
As always, MedCost is here to assist you with ACA reporting requirements. If you have any questions, please contact your Account Manager or MedCost Compliance at [email protected].