Employers With 50 or More Employees Must Report Under Section 6056

It’s that time of the year again when employers with 50 or more employees are required to report to the IRS information about whether they offered health coverage to their employees and if so, information about the coverage offered.

This information also must be provided to employees.

It has been 5 years since employers have been required to file with the IRS and provide employees with proof of health coverage, however, every year employers ask questions and have issues with the concept of 6056 reporting. If an employer is deemed an Applicable Large Employer (ALE) they must file. An ALE is an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.

GENERAL SECTION 6055 REPORTING REQUIREMENTS

ALE’s subject to the Affordable Care Act’s Employer Mandate, whether fully-insured or self-insured, are required to report under Sections 6055 and 6056. ALE’s will satisfy reporting requirements by filing forms 1094-C and 1095-C for each full-time employee, regardless of whether that employee was offered coverage or accepted or declined coverage.

INFORMATION REQUIRED TO BE REPORTED

• Name, address, and Employer Identification Number of
  the employer
• Name and telephone number of a contact person representing the ALE
• Name, address, and Tax ID Number of the employee
• The months, if any, during which the employee was covered under an eligible employer sponsored plan
• Months for which the employee is enrolled in and entitled, for at least one day, to receive benefits
• Certification of whether the ALE offered to its full-time employees, and dependents, the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, by calendar month
• Number of full-time employees for each calendar month
• Total number of employees for each calendar month

HOW TO FILE

Most employers use their payroll processor or health insurance agent or broker to assist them. Of our over 750 employers I am not aware of any that actually do the work themselves as it is important to file all the information correctly and timely.

In general, ALEs responsible for reporting under Section 6056 may furnish statements to employees and file returns with the IRS on paper or electronically. However:

• Employee statements must be furnished on paper unless
  an employee properly consents to electronic delivery;
• Returns must be filed with the IRS electronically if an ALE is filing 250 or more individual statements (Forms 1095-C) per calendar year; and
• The IRS encourages electronic filing for all other returns.

FILING DEADLINES

The IRS extended the 2021 due date for furnishing forms under Section 6056, related to information for 2020 reporting. This deadline extension provides an additional 30 days for furnishing the 2020 Form 1095-C, extending the due date from Jan. 31, 2021, to March 2, 2021.

However, the IRS did not extend the 2021 due date for filing forms with the IRS under Section 6056, related to information for 2020 reporting. Therefore, the due date for filing Forms 1094-C and 1095-C with the IRS is March 1, 2021 (since Feb. 28, 2021, is a Sunday), or March 31, 2021, if filing electronically.

If you would like a copy of the Heffernan Section 6056 Employer Reporting Guide please email me at barryc@heffins.com.