HSA-FSA Qualifying Medical Expenses
Need a reminder of commonly-used items you can purchase with your pre-tax HSA or FSA dollars? Here's our list as of November 29, 2023.
Required Reporting
In January, 2015, the ACA will mandate that employers who are subject to the Employer Shared Responsibility provisions must report certain information...
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Employer Shared Responsibility
In January, 2015, the Affordable Care Act (ACA) will mandate that employers who are subject to the Employer Shared Responsibility provisions (50+ Full-Time-Equivalent employees) must report certain information regarding the health coverage they offer their full-time employees. The law also requires reporting from insurance carriers, employers with self-funded plans and other entities that provide insurance. This is known as Section 6056 and 6055 Reporting, respectively. The reporting requirements take effect on January 1, 2015, and the first reports are due to the IRS in 2016. The final rules have yet to be published, and some of the current requirements and IRS proposed regulations are described below. Once the final rules are published, the IRS will encourage employers to voluntarily implement information reporting in 2014 to prepare for the full application of reporting requirements starting in 2015.
Section 6056 Reporting
The following information must be reported to the IRS under Section 6056:
- Information about the employer who is offering health coverage - including contact information for the employer and the number of full-time employees. For clients of ISIhr who use ISIhr's large group health benefits, this would be information about ISIhr.
- Names, addresses, and taxpayer ID numbers of all the employer's full-time employees and information about the coverage offered to each employee, by month, including the cost of self-only coverage.
This provision also requires that employers provide a written statement to their full-time employees that contains the information that will be on the Section 6056 report they submit to the IRS so that the employee may be able to use that information to determine whether they can claim an individual tax credit. The first employee statements must be provided by early 2016.
Information contained on these reports will be used to administer and ensure compliance with the eligibility requirements for the Employer Shared Responsibility provisions and the individual premium tax credit.
Section 6055 Reporting
The following information must be reported to the IRS under Section 6055:
- Information about the entity providing coverage, including contact information
- The name of each individual enrolled in minimum essential coverage along with taxpayer ID numbers and the months they were covered.
IRS and US Treasury Guidelines
The proposed regulations issued by the Treasury describe a variety of options to potentially reduce or streamline information reporting, such as:
- Replacing section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.
- Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.
- Allowing employers to report the specific cost of purchasing employer-sponsored coverage to an employee only if the cost is above a specified dollar amount.
- Allowing self-insured group health plans to avoid furnishing employee statements under both section 6055 and section 6056 by furnishing a single substitute statement.
- Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.
What Should Employers Do?
Though the final rules have yet to be published, clients of ISIhr will be in luck since ISIhr is already keeping track of all this information. It may seem like this requirement is far away, but it's really important that employers take the time the delay has afforded to really figure out your workforce, conduct lookback tests, and decide how you want to handle these and other requirements of ACA. ISIhr is happy to offer consulting to ensure you make the best decisions concerning your specific business situation.