The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Section 6055 and 6056. These new reporting rules require Applicable Large Employers (ALE’s) and/or self-insured employers to report information to the Internal Revenue Service (IRS) on the health coverage offered during the year. Related statements must also be provided to individuals.

On June 29, 2015, President Barack Obama signed the Trade Preferences Extension Act of 2015 into law, which increases penalties for the failure to file correct information returns or to provide individual statements under either Section 6055 or Section 6056. These changes are effective for information returns and individual statements required to be filed or provided after Dec. 31, 2015.

The increased penalty amounts are as follows:

• General penalty amount: $250 for each return (increased from $100), up to an annual maximum of $3 million per calendar year (increased from $1.5 million). The annual maximum for employers with up to $5 million in annual gross receipts is $1 million (increased from $500,000).
• Violations corrected within 30 days: $50 for each return (increased from $30), up to an annual maximum of $500,000 per calendar year (increased from $250,000). The annual maximum for employers with up to $5 million in annual gross receipts is $175,000 (increased from $75,000).
• Violations corrected before Aug. 1: $100 for each return (increased from $60), up to an annual maximum of $1.5 million per calendar year (increased from $500,000). The annual maximum for employers with up to $5 million in annual gross receipts is $500,000 (increased from $200,000).
• Violations due to intentional disregard: $500 for each return (or, if greater, 10 percent of the aggregate amount of the items required to be reported correctly) (increased from $250), with no annual maximum.

Short-Term Relief From Penalties
For returns and statements filed and furnished in 2016 to report offers of coverage in 2015, the IRS will not impose penalties on reporting entities that can show they make good faith efforts to comply with the information reporting requirements. This relief is provided only for incorrect or incomplete information reported on the return or statement, including Social Security numbers, taxpayer identification numbers or birthdates. No relief is provided for reporting entities that:

• Do not make a good faith effort to comply with these reporting regulations; or
• Fail to file an information return or provide an individual statement on time.

Action Items for Employers
Reporting under Section 6055 and Section 6056 is done on a calendar year basis, regardless of whether the employer has a non-calendar year plan. Employers will need to have information for the full 2015 calendar year in order to file complete and accurate reports in 2016. This means that employers will need to collect and record information in 2015 in order to prepare for the filing deadlines in 2016. Employers should begin tracking this information now to avoid penalties for failure to comply with these reporting requirements.

Please contact your NEEBCo representative to review your reporting requirements and determine the most appropriate method of tracking for your business.