As we were posting, the IRS released draft instructions for 2015 ACA reporting. These draft instructions confirm that for 2015 reporting, ALEs that contribute to multiemployer health plans need only to receive confirmation from each such plan of three things: that the plan (1) offers minimum essential coverage that is affordable, (2) provides minimum value to individuals who satisfy the plan’s eligibility conditions, and (3) offers minimum essential coverage to those individuals’ dependents. The ALEs do not need more detailed information from the multiemployer plans to complete their 2015 reports. This IRS clarification is welcome guidance to ALEs that contribute to one or more multiemployer plans, as it simplifies their preparation for 2015 reporting.
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The Affordable Care Act (ACA) reporting requirements are in full force for 2015. These reporting rules require both applicable large employers (ALEs, which are generally employers with 50 or more full-time employees) and other entities that provide minimum essential health coverage—including multiemployer health plans—to gather and report certain information to the IRS and covered individuals. These entities must report 2015 health coverage information to individuals by February 1, 2016 (the annual due date is January 31, but the date is adjusted for 2016 because January 31 is a Sunday) and to the IRS by the end of February or March 2016, depending on the number of reports.
Identifying and capturing the required information can be a daunting task for an ALE. ALEs must collect a significant amount of data for each full-time employee (i.e., an employee who works on average 30 or more hours a week or 130 or more hours a month) for each month of 2015. This information includes: (i) each month that an employee enrolled in coverage (or the reason an employee was not enrolled); (ii) each month an employee was offered minimum essential coverage providing minimum value; (iii) each month that minimum essential coverage was offered to the employee’s spouse and/or dependent children under age 26; and (iv) the dollar amount of the employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value that was offered.
The task of collecting the required information is further complicated when an ALE has employees covered by one or more multiemployer health plans instead of the ALE’s own plan(s). Because the terms of the multiemployer health plan govern when an individual is eligible for benefits and receives an offer of coverage, and the multiemployer health plan maintains the enrollment information about individuals and their dependents, an ALE likely will not have all of the information it needs to complete its reports in its possession. For this reason, the IRS will permit a multiemployer health plan to report on an ALE’s behalf.
However, an ALE should assess the risks and benefits associated with allowing the multiemployer health plan(s) to which it contributes to report on its behalf. Factors that an ALE should consider include the following:
- Liability for ALE reporting will remain with the ALE even if the multiemployer health plan facilitates the IRS filings and furnishing of returns to the ALE’s full-time employees.
- Under a good faith interpretation of the reporting rules and instructions issued to date, an ALE that is filing its own returns need only receive confirmation of certain coverage information from the multiemployer health plan and need not obtain all of the detailed information mentioned above. However, ALEs that decide to file on their own behalf will need to work with the multiemployer health plan or fund office to obtain the more limited information necessary to complete the required form.
- As providers of minimum essential health coverage, multiemployer health plans are separately required to make their own ACA filings and therefore may not be willing to take on the added responsibility of reporting for their contributing ALE members. In this case, the ALEs will need to file on behalf of their employees who participate in the multiemployer plan.