IRS Releases Q & A on Section 6055 Reporting

This information applies to clients who are self-insured. Carriers are responsible for provided TINs for clients who are fully insured.

The IRS recently released the following Q & A on Section 6055 as a follow up to the new reporting rules that require all entities that provide minimum essential coverage to provide information to the IRS about the health plan coverage they offer. The additional reporting is intended to promote transparency with respect to health plan coverage and costs. It will also provide the government with information to administer the individual mandate (that is, the requirement that individuals obtain acceptable health insurance coverage for themselves and their family members or pay a penalty).

Information reporting under Section 6055 is voluntary for calendar year 2014.

Reporting is first required in early 2016 for calendar year 2015.

In the FAQs, the IRS stated that it is necessary for self-insured employers to report the TINs (Tax Identification Numbers or SSN) for all covered individuals. The TIN will be used by the IRS to verify an individual’s coverage without the need to contact the individual. If an employer sponsoring a self-insured health plan is unable to obtain a TIN after making a reasonable effort to do so, the IRS stated that the covered individual’s date of birth may be reported in lieu of the TIN. A health coverage provider will not be subject to a penalty if it demonstrates that it properly solicits the TIN, but does not receive it.

So what exactly defines a “reasonable effort”?

An employer sponsoring a self-insured group health plan must make an initial solicitation for all covered individuals’ TINs during the 2014 open enrollment. If the employer is missing covered individuals’ TINs after the open enrollment, they must make a second solicitation by December 31, 2014 (January 31, 2015 if the group’s open enrollment is in December, 2014). If the employer is still missing TINs after the second solicitation, they must make a third solicitation by December 31, 2015. If an employer is unable to obtain a covered individual’s TIN after the third solicitation, they may use his or her birthday when completing the 6055 return.

The solicitations can be made orally, in writing, or by email. The employer should make a record indicating that they attempted to solicit covered individuals’ TINs in accordance with the guidance above.

If you have questions regarding the 6055 reporting requirements, please contact your Kistler Tiffany Benefits Consultant.