FAQ’s On Reporting Employer-Provided Health Insurance Offer and Coverage

Posted on May 21, 2015


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Under the Patient Protection and Affordable Care Act, providers of minimum essential coverage during a calendar year must report certain coverage information to the Internal Revenue Service and to covered individuals.

Following are some frequently asked questions regarding this reporting responsibility.

Q: What is minimum essential coverage?

A: “Minimum essential coverage” is the coverage that a person must maintain in order to avoid the individual shared responsibility payment. In general, it includes government health plans, private employer group health plans, self-insured plans, COBRA coverage and retiree coverage. It also includes individual health plans purchased directly from an insurer or the Marketplace. Minimum essential coverage includes student health plans, Medicare and most Medicaid plans.

Minimum essential coverage does not include: coverage consisting solely of stand-alone dental or vision insurance, accident or disability insurance or workers compensation insurance. Minimum essential coverage does not include Medicaid providing only family planning services, tuberculosis related services or treatment of emergency medical conditions.

Q: Does the Form 1095-C notice replace W-2 reporting?

A: No. The W-2 reporting is a separate reporting requirement. At present, W-2 reporting is required for any employer required to file at least 250 Forms W-2 for the preceding calendar year and for other employers, pending the expiration of transitional filing relief, the reporting is optional. However, the Forms 1094-C and 1095-C obligations apply to all applicable large employers.

Q: Does the employer have to report and give notice for its flexible spending arrangement?

A: In general flexible spending arrangements and accounts are not minimum essential coverage so no reporting or notice should be required. Also, see the Q&A below regarding HRAs.

Q: If the employer sponsors a Health Reimbursement Arrangement (HRA) in conjunction with its high deductible heath plan, must the employer report and give notice?

A: Two Internal Revenue Code sections, Section 6055 and Section 6056 deal with the reporting and notice requirements. The regulations under Code Section 6055 indicate that no separate reporting is required for HRAs that supplement a primary health plan providing minimum essential coverage. This includes a primary health plan that is a high deductible health plan. Although the same exception does not appear in the regulations under Code Section 6056, pending further guidance there is a reasonable basis not to report or provide the notice for the HRA.

Related to this topic, see Reporting Employer-Provided Health Insurance Offer and Coverage.

For additional information, please contact David M. Mosier by phone at (814) 459-2800 or via email at dmosier@kmgslaw.com.

David M. Mosier is a Shareholder at Knox McLaughlin Gornall & Sennett, P.C.’s Erie office.

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