ACA Reporting for Employers with a Self-Insured Plan

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ACA Reporting for Employers with a Self-Insured Plan

By Brian Gilmore | Published November 29, 2021

Question: How is ACA reporting different for employers that sponsor a self-insured medical plan?

Short Answer: ALEs with a self-insured medical plan (including a “level funded” plan) must complete Part III of the Form 1095-C to report the months of coverage for the employee and any covered dependents. Non-ALEs with a self-insured medical plan must provide employees with the Form 1095-B to report coverage.

The ACA employer mandate pay or play rules apply to employers that are “Applicable Large Employers,” or “ALEs.” In general, an employer is an ALE if it (along with all members in its controlled group) employed an average of at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year.

ALEs are subject to both the ACA employer mandate under §4980H as well as the ACA reporting requirements under §6056 via Forms 1094-C and 1095-C.

Important Note: The IRS recently proposed new ACA reporting regulations that make permanent the 30-day automatic extension from prior years for employers to furnish the Form 1095-C to individuals. The rules apply to the current season of ACA reporting, thereby extending the deadline to provide the 2021 Forms 1095-C to March 2, 2022. The proposed regulations also confirm the end of the IRS good faith enforcement safe harbor, which was previously available as transitional relief to avoid penalties for incorrect or incomplete information on the ACA reporting forms.

ACA Reporting Requirements

The specific ACA reporting requirements vary depending on whether the employer is an ALE and whether the medical plan it sponsors is fully insured or self-insured. Note that so-called “level funded” plans are treated as self-insured for these purposes because they are not fully insured.

ALE Sponsoring a Self-Insured Medical Plan

ALE Sponsoring a Fully Insured Medical Plan

Non-ALE Sponsoring a Self-Insured Medical Plan

Non-ALE Sponsoring a Fully Insured Medical Plan

Additional ACA Reporting Requirements for Self-Insured Plans: §6055 Coverage Reporting

ALEs with a self-insured medical plan are subject to §6055 and §6056 reporting. This means that, in addition to Parts I and II, they must also complete Part III of the Form 1095-C for all covered employees and dependents.

Part III Overview

The top of Part III states: “If Employer provided self-insured coverage, check the box and enter the information for each individual enrolled in coverage, including the employee.” (emphasis added)

Dependent SSN Solicitation Process

Part III includes an SSN entry field for the employee and each covered dependent. However, there is no requirement that the employee provide each covered dependent’s SSN, nor is there any requirement that the employer obtain each covered dependent’s SSN from the employee.

What About Fully Insured Medical Plans?

ALEs sponsoring fully insured medical plans are not subject to the §6055 reporting in Part III of the Form 1095-C. Their only reporting responsibility is under §6056, which is limited to Parts I and II of the Form 1095-C (as well as the full Form 1094-C).

Important Note: This relief with respect to insurance carriers furnishing coverage information to individuals on the Form 1095-B does apply to ALEs reporting on the Form 1095-C. The ACA employer mandate remains fully in effect, and therefore so do the employer ACA reporting requirements via Form 1095-C.

Summary

Self-insured health plans have additional reporting requirements under §6055 that require ALEs to complete the employee and dependent coverage information in Part III of the Form 1095-C. Employers leave this Part III section blank for employees enrolled in a fully insured plan—that coverage information is instead reported by the carrier on a separate Form 1095-B.

The Author
Brian Gilmore

Lead Benefits Counsel, VP, Newfront

Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans.