IRS Publishes Form Drafts for New ACA Employer Reporting Requirement

On Thursday, July 24, 2014, the IRS published highly anticipated drafts of the forms large employers with 50 or more full-time equivalent employees will be required to use for the Code 6056 reporting requirement.  Code 6056 requires applicable large employers to file a transmittal with the IRS (Form 1094-C) and provide a new return to employees (Form 1095-C) in January 2016 for the 2015 calendar year.  This reporting requirement has a triple purpose, as it is designed to allow the IRS to enforce the employer mandate, enforce the individual mandate, and confirm eligibility for premium tax credits for coverage purchased through an Exchange.

This reporting and disclosure requirement is new for employers and may catch some employers off-guard.  For example, the reporting requires collection and disclosure of information including, but not limited to, the following:

  • Social Security numbers of employees, spouses and dependents;
  • Names and EINs of other employers within the employer’s controlled group of corporations for each month of the calendar year;
  • Number of full-time employees for each calendar month;
  • Total number of employees (full-time equivalents) for each calendar month;
  • Section 4980H transition relief indicators for each calendar month;
  • Employee’s share of the lowest-cost monthly premium for self-only, minimum value coverage for each calendar month; and
  • Applicable Section 4980H safe harbor for each calendar month.

Please note these forms are in draft form only and are subject to change. The IRS has not yet released instructions for the forms, which should provide the detail necessary to complete some of the more ambiguous cells in the forms. The first transmittal and returns will not be filed until January 2016, but much of the information must be reported for each calendar month of 2015. Ensuring internal time and attendance systems, record management, and payroll systems are capable of producing the required information is critical. Although there is much information left to be released by the IRS concerning the Code 6056 reporting requirement, employers subject to this requirement should begin preparing now.