The Affordable Care Act (ACA) added two employer reporting requirements to the Internal Revenue Code (Code):
- Code § 6056 requires applicable large employers (ALEs) to provide an annual statement to each full-time employee detailing the employer’s health coverage offer.
- Code § 6055 requires employers that provide minimum essential coverage under a self-funded (self-insured) plan to provide an annual statement to covered persons.
What is the purpose of the new employer reporting requirements?
The reporting requirements are intended to help the IRS administer several provisions under the Affordable Care Act. Specifically, the IRS will use information reported by employers to determine:
- Employees that are (or are not) eligible for subsidies if they purchase health insurance in the individual Health Insurance Exchange (Marketplace);
- ALEs that fail to offer affordable minimum value coverage to full-time employees and whether the employer may be subject to potential penalties; and
- Individuals that are enrolled in minimum essential coverage that satisfies the ACA’s individual mandate.