What Healthcare Insurance Companies Need to Know About ACA Tax Reporting

What basic information needs to be provided by healthcare insurance carriers or providers to their customers for accurate ACA tax reporting?

ACA Taxes Healthcare Insurance CompaniesWhat basic information needs to be provided by healthcare insurance carriers or providers, and why? Basically the purpose of the reporting is to communicate the details of employee health insurance coverage, including proof that minimal coverage requirements have been met.

ACA Tax Reporting – Section 6055

The rules governing the Affordable Care Act (ACA) implementation are designed to provide minimum essential coverage, determine qualified subsidies, and to protect consumers from insurance abuse.

To ensure complete and accurate reporting, providers must report under section 6055 for all their covered individuals. The requirements include:

  • Identifying the employer with all required information
  • Identifying the responsible individual to be covered with required ID information
  • Providing full ID information for all covered dependents and/or spouses

In addition, the healthcare provider needs to give a designated contact person’s name and telephone number for all covered employees to contact with questions or concerns.

Who Can Fulfill Reporting Requirements?

Can the health care provider, or a third party like a payroll company, fulfill the necessary reporting requirements?

Yes they can, but this does not transfer the liability for failure to report or furnish proper statements from the employer. It is ultimately the employer’s responsibility to provide the correct information to the 3rd party in a timely fashion to enable on-time filing.

Failure to File

There are a range of penalties for failing to file to the IRS and issue payee statements. For filings that will be due in 2016, for the 2015 tax year, penalties for failure to do so can increase up to $250.00 per filing up to a maximum of $3 million.

The paper filing deadline for insurance carriers and employers is February 28. The electronic filing deadline is March 31. Summary transmittal forms also need to be filed by those dates.

Recipient copies must be postmarked no later than January 31 and sent to the last known permanent address of the employee. The recipients can also opt to receive their copies electronically by the January 31 deadline.