According to recent draft instructions for Form 1094-B and 1095-B, employers (regardless of size) that offer HRAs will be required to complete Section 6055 reporting in 2016.

Previously, HRAs were widely believed to be considered “supplemental coverage” for which separate reporting was not required.

Prior IRS FAQ’s indicated that a HRA provided to employees in conjunction with a fully insured health plan would not trigger a reporting obligation, so long as the same employer sponsored both the HRA and the health plan.

However, according to the 2015 draft instructions, coverage isn’t provided by the same “plan sponsor” if they aren’t reported by the same reporting entity. The insurance carrier will be reporting 1094-B/1095-B forms for the fully insured health plan. In the majority of circumstances, the insurance carrier does not administer the HRA (if one is offered). This means that the insured group health plan and the HRA covering the employees of the same employer are not considered “supplemental” – triggering the requirement for separate 1094-B/1095-B filings for the health plan and the HRA.

If this clarification in the 2015 draft instructions is included in the final versions, this will impose reporting requirements on employers that previously would not have been required to report under Section 6055.

Thus:
1) Employers under 50 full-time equivalents (FTEs) who offer a HRA would be required to file 1094-B/1095-B forms to report information about individuals enrolled in the HRA, and provide related statements to those individuals.
2) Applicable Large Employers (50 or more FTEs) with fully insured health coverage and a HRA will be required to complete Part I, II and III of Form 1095-C (under the combined 6055/6056 reporting method) for any individuals enrolled in the HRA.

These are draft versions only. The IRS may make changes prior to releasing the final 2015 versions.

NEEBCo will continue to update clients on the 6055 and 6056 reporting requirements as final forms and instructions are released.