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October 9, 2014

IRS Releases Draft Instructions on Affordable Care Act Reporting that Help Clarify the Requirements for Multiemployer Plans

On February 8, 2015, the Internal Revenue Service (IRS) posted final forms and instructions for multiemployer plans to report health care coverage under Internal Revenue Code (IRC) Section 6055. The final forms (Form 1095-B and Form 1094-B) and instructions are nearly identical to the drafts released last year.

The Internal Revenue Service (IRS) released draft instructions for the informational returns that the Affordable Care Act1 requires sponsors of multiemployer plans with self-insured coverage to file with the IRS and to give to plan participants.2 The forms must be completed in early 2016, to report data for 2015. Reporting is optional in 2015 (to report data for 2014), and therefore the forms could be modified prior to the 2016 mandatory requirement.

The IRS is accepting comments on the draft forms and instructions. Comments should be submitted as soon as possible and no later than November 3, 2014.

This Capital Checkup, which is intended for plan administrators, provides an overview of the draft forms and instructions released for 2014. (A separate Capital Checkup that discusses large employer reporting, including where large employers contribute to multiemployer plans, will be of interest to employer trustees).

Form 1095-B

Form 1095-B3 is the form that sponsors of multiemployer plans will complete and file with the IRS. They will also give a copy to each “responsible individual” (i.e., the plan participant on behalf of all covered family members). This form will allow plan participants (and their covered dependents) to document which months during the calendar year they were enrolled in the plan and, thus, met their individual mandate to have health coverage.

Form 1095-B is divided into four parts, as noted in the table below.

Form 1095-B

Click here to access draft form 1095-B.

Part Number
(Line Numbers)
Key Information Required of Multiemployer Plans
Part I
(Lines 1–9)
Contact information, including a Social Security number, for the participant

Multiemployer plans complete line 8 (“Origin of the Policy”) by putting code “E” in the box provided
Part II
(Lines 10–15)
Leave blank
Part III
(Lines 16–22)
Contact information for the plan, including the plan’s employer identification number (EIN)
Part IV
(Lines 23–28)
Information about the specific months that any individual was enrolled in self-insured coverage**

An individual is considered enrolled for the entire calendar month if the individual was enrolled for one day of the month

Each individual’s Social Security number (including Social Security numbers for enrolled family members***)

  * The available codes are “A” through “F” with code “E” reserved for multiemployer plans.

 ** If the plan’s coverage is provided on an insured basis, the health insurance carrier must handle the required reporting, and the plan will not have to complete, furnish or file these forms for participants enrolled in such insured coverage.

*** Plan administrators that are not able to collect dependents’ Social Security numbers can report date of birth instead, but only if the administrator has made reasonable attempts to collect the Social Security number as set forth in IRS regulations. For more information, see Segal Consulting’s May 28, 2014 Capital Checkup, “Multiemployer Overview of the Affordable Care Act’s Reporting Requirements.”


Form 1094-B

This is the transmittal form that plans file with the IRS along with copies of the Forms 1095-B.4 It requires contact information for the plan, a count of the number of Forms 1095-B filed with the transmittal form and a signature certifying that the transmittal form and the accompanying forms are complete and correct.

Large Contributing Employers and Their Reporting Requirements

Regulations implementing the employer shared responsibility penalty provide that employers will not face a penalty for full-time employees for whom they are contributing to a multiemployer plan, as long as the plan provides coverage that is minimum value and affordable to eligible participants and their dependents under age 26. Contributing employers will complete Form 1095-C for full-time employees for whom they are contributing to a multiemployer plan by using an indicator code identifying that the multiemployer rule applies. Consequently, contributing employers will likely request the multiemployer plan to provide verification that the plan provides minimum value and affordable coverage to eligible participants and their dependents under age 26, as this general information will give the employer the information it needs to use the correct indicator code. However, there does not appear to be a need for the plan and the contributing employer to collaborate on completing the large-employer reporting forms. As discussed above, the multiemployer plan will report the actual months that the employee was covered under the plan on Form 1095-B, the form that the multiemployer plan (as a provider of minimum essential coverage) must give to its plan participants and file with the IRS. The plan would not give this form to the plan’s contributing employers.

Action Steps

Now that the forms and instructions have been released, plan administrators should work closely with their software vendors to determine if they will be able to assist with meeting the reporting requirements. Time is of the essence because the proper data needs to be collected starting in January 2015.

One of the biggest challenges may be collecting Social Security numbers for covered dependents, a process that could take some time. Plan administrators that have not previously requested these numbers should request them twice before the end of 2014 (e.g., once during open enrollment, if any, and once before December 31, 2014) in order to be treated as making a reasonable attempt to collect them. If these numbers have been requested previously (but have not been provided), an additional request should go out by December 31, 2014 and again by December 31, 2015.

• • •

As with all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their legal counsel for authoritative advice on the interpretation and application of the Affordable Care Act and related guidance, including the guidance summarized in this Capital Checkup. Segal Consulting can be retained to work with plan sponsors and their attorneys on compliance issues.


1 The Affordable Care Act is the shorthand name for the Patient Protection and Affordable Care Act (PPACA), Public Law No. 111-48, as modified by the subsequently enacted Health Care and Education Reconciliation Act (HCERA), Public Law No. 111-152. (Return to the Capital Checkup.)

2 For background information about these reporting requirements, see Segal Consulting’s May 28, 2014 Capital Checkup, “Multiemployer Overview of the Affordable Care Act’s Reporting Requirements.” The draft instructions, which were released on August 28, 2014, are on the IRS website. (Return to the Capital Checkup.)

3 The draft form is on the IRS website. (Return to the Capital Checkup.)

4 The draft form is on the IRS website. (Return to the Capital Checkup.)


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