We have received several questions about the Affordable Care Act (ACA) reporting requirements and prepared this primer to give some basic information on the reporting rules. Our main message is don’t worry about this now, because as we get closer to the end of the year we will be providing more detailed information and talking with employers individually to let them know what needs to be done in 2016.
What is the ACA reporting? In general it is the IRS’s way to find out directly from employers and insurers that the ACA rules are being followed. Since the ACA rules are different for large groups (those subject to Employer Shared Responsibility) and small groups, the reporting requirements are also different. Most small groups (those that have fully insured health plans) won’t have to do any reporting because the insurance carriers will take care of it. However, large groups and employers with self funded health plans will have to provide information both to their employees and to the IRS.
As we stated, the requirement starts in early 2016 for most people. However, employers may voluntarily report in 2015 on health coverage they provided in 2014. Most health insurance carriers will issue the required reports in 2016 and annually thereafter.
There are three reports that will be filed, depending on the source of insurance and size of company, the 1095-A, 1095-B and 1095-C. We have created the following explanation for your information and planning:
1095-A: By January 31, 2015, Marketplaces (such as the Massachusetts Health Care Connector) will issue Minimum Essential Coverage (MEC) Forms 1095-A to individuals covered through a qualified health plan in the Marketplace in 2014. These forms will list all members covered under the plan and the calendar months in which they had coverage.
1095-B: By January 31, 2016, insurance carriers and small self-insured employers will be required to issue Form 1095-B MEC forms directly to members covered through small employers. The forms will list all members covered under the plan and the calendar months in which they had coverage. Insurers and small self-insured employers will also send MEC information directly to the IRS.
1095-C: By January 31, 2016, large employers, whether fully insured or self-insured, will have to provide information to their employees on whether the plan met 60% minimum value (MV) and was affordable (i.e. single only coverage is not more than 9.5% of employee’s income). Large employers will also be required send the same information to the IRS on form 1094-C.
Up until now, HIPAA rules have required that Certificates of Creditable Coverage (also known as HIPAA Certificates) be automatically sent out to members when their coverage ends. This rule was in place to protect people who changed jobs so that they could show continuity of coverage and avoid pre-existing conditions limits. However, since the Affordable Care Act (ACA) has eliminated pre-existing condition limits, the ACA final regulations amend the HIPAA requirement that health plans send these certificates to terminating members.
However, there are situations where these certificates will still be needed, such as when someone looses coverage due to a qualifying event and needs to move on to his or her spouse’s plan outside of their open enrollment. Members who need a certificate as proof that they lost coverage will need to call their health plan’s member services to request one. It generally takes about two weeks for certificates to be printed and mailed, depending on the carrier.