Prepare for ACA Reporting Requirements
- The Affordable Care Act (ACA) added Sections 6055 and 6056 to the Internal Revenue Code, which create two annual information-reporting requirements. Reporting requirements are based on an employer's size and the type of plan it offers.
- Section 6055, also known as minimum essential coverage (MEC) reporting, requires providers of MEC to report information to the IRS on each individual to whom MEC was provided and to furnish a written statement to covered individuals.
- Section 6056, also known as applicable large employer (ALE) reporting, requires an ALE to file information returns with the IRS and to provide a written statement to its full-time employees about the coverage the employer offered.
- The purpose of the reporting requirements is to promote transparency regarding health plan coverage and costs, provide the IRS with the information required to enforce the employer and the individual mandates and determine eligibility for premium tax credits for individuals purchasing coverage through the health insurance marketplace.