Affordable Care Act
ACA Fact Sheet—Section 6056 Reporting Requirements
Section 6056 of the Internal Revenue Code, the Affordable Care Act (ACA) provision, requires applicable large employers (ALEs) to report group medical coverage that was offered to employees during the prior calendar years. Section 6056 reporting includes two forms for the ALE:
- Form 1095-C to report offers of cost and coverage information to full-time employees
- Form 1094-C to report offers of cost and coverage information to the IRS; the form aggregates data reported on Form 1095-C
The primary purposes of Section 6056 are for the IRS to determine employees’ eligibility for a premium tax credit and to determine the ALE’s compliance (or lack of compliance) with the employer shared responsibility provision. Reporting requirements began in 2015.
Form 1095-C Due Date
ALEs must provide a Form 1095-C to full-time employees by January 31 of the year immediately following the end of the calendar year. Each ALE must issue only one Form 1095-C for each full-time employee that was employed for at least one month in the calendar year, regardless of whether they were offered or enrolled in a medical plan. ALEs must also issue Form 1095-C for any employee that was enrolled in medical coverage, whether or not the employee was full-time, for any month in the calendar year. Forms 1095-C must be sent on paper by mail or hand delivered, unless the employee consents to receive the statement in an electronic format.
Employees do not need to include Form 1095-C when filing their tax returns.
The IRS extended the deadline to provide the forms for the 2015 through 2018 calendar years, however no deadline extension has been announced for 2019.
Form 1094-C Due Dates
ALEs must file Form 1094-C with the IRS annually by February 28 (March 31 if filed electronically) of the year immediately following the end of the calendar year of filing. Electronic filing is required if the ALE files at least 250 Forms 1095-C.
If the filing deadline falls on a weekend or holiday, the form is due on the next business day. Offer of coverage data is always reported on a calendar-year basis, even if the ALE’s benefits plan year does not align with the calendar year.
The IRS extended the filing deadline for the 2015 through 2017 calendar years, however no deadline extension was provided in 2018.
Reporting Requirements Apply to All Members of a Controlled Group
Under ACA, an ALE may be a single entity or consist of a group of related entities, referred to as a “controlled group.” The Section 6056 reporting requirements apply separately to each entity that is part of the controlled group. A small employer (with fewer than 50 full-time equivalent (FTE) employees) would be subject to Section 6056 reporting requirements even though it is only considered an ALE as a result of the controlled group aggregated FTE count. For example:
- An ALE is comprised of a parent corporation and 10 wholly owned subsidiary corporations with 20 FTEs per entity.
- Each of the 11 entities that are part of the controlled group (the parent and subsidiaries) with full-time employees will be responsible for filing Section 6056 returns and employee statements. Each entity files the Forms 1095-C and 1094-C under their own Federal Identification Number.
Penalties for Non-Compliance
The IRS can impose penalties on ALEs failing to complete and submit the forms. Failure to do so could result in a $250 penalty for each deficient form up to a $3 million cap or $500 for each “intentional violation” with no cap, each calendar year.
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