August 10, 2016

H&W Soliciting Tax Identification Numbers & Section 6055 Reporting

The IRS has issued proposed regulations for Section 6055 reporting of minimum essential coverage. Employers with self-insured health plans must report this information to the IRS on either Form 1095-B or in Part III of Form 1095-C, if the coverage is provided by an applicable large employer.

Section 6055 reporting identifies those individuals who are enrolled in minimum essential coverage.  In order to accomplish this, the reporting forms require the inclusion of each individual’s tax identification number (“TIN”).  For an individual, this is his or her social security number.  While employers generally have the SSNs of their employee, they are less likely to have this information for an employee’s spouse or dependents.  The proposed regulations include new guidance relating to the solicitation of TINs and the solicitation process employers should follow in order to avoid any penalties for filing without the proper TINs.

As long as reasonable efforts are made to secure the TIN of covered individuals, an employer is permitted to report a date of birth when no TIN has been provided.  The proposed regulations lay out the following, 3-point process that should be used in order to meet the “reasonable efforts” guideline:

1. Initial Solicitation:

The first step of the TIN solicitation process is the initial request for an individual’s TIN when the employer receives a substantially complete application for new coverage or to add an individual to existing coverage.  Therefore, receipt of an employee’s application would be considered the initial solicitation.

2. Second Solicitation:

If the TIN is not initially received, then a second solicitation must be made no later than 75 days after the initial solicitation.

3. Third Solicitation:

If the TIN is not received from the second solicitation then a third solicitation must be made by December 31 of the year following the initial solicitation.

If individuals are already enrolled in coverage, July 29, 2016 is to be used as the initial solicitation date as long as a TIN was solicited as part of the application for coverage or it was solicited at any other point before July 29, 2016.  The second solicitation is then required within 75 days after July 29, 2016 which would be October 12, 2016.

Although this process is part of a proposed rule, the IRS has stated that employers may rely on the process pending the release of a final rule.

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