As discussed in our February 2015 client alert " IRS Releases Additional Guidance on Reporting Health Coverage Information", employers subject to the health coverage information reporting requirements of the Patient Protection and Affordable Care Act of 2010, as amended ("PPACA"), have the option of filing the applicable returns (IRS Forms 1094 and 1095) on a voluntary basis in late 2015. The IRS has recently finalized two publications addressing the electronic filing process. Even employers who do not choose to make voluntary submissions this year will want to familiarize themselves with the process summarized in this client alert which is unlikely to change substantially for the required submissions beginning in early 2016.
Whether an employer first files Forms 1094 and 1095 in 2015 or 2016, the electronic filing process will take place in two stages: test filing and actual filing. Prior to either, one or more Responsible Officials and at least two Contacts must be designated for communications with the IRS. Only certain senior officials within an organization may be designated as Responsible Officials who then register for electronic services and apply for a Transmitter Control Code ("TCC") which serves as a unique identifier for the organization.
Test filing takes place through the Affordable Care Act Assurance Testing System ("AATS"). In order to be accepted, hypothetical taxpayer data provided by the IRS in one or more "scenarios" consisting of a single Form 1094 and accompanying Form(s) 1095 must be transmitted without error to the IRS. IRS Publication 5164 provides detailed information about these testing procedures.
Actual filing takes place through the Affordable Care Act Information Returns ("AIR") Program using the TCC as described above. The required data exchange between the employer and the IRS involves numerous technical protocols concerning transmission methodology, composition, and data structure. IRS Publication 5165 provides detailed information about these protocols, together with the processes for validation, correction, and replacement.
The AATS and the AIR Program represent the technical implementation of the PPACA information reporting regulations we discussed in our March 2014 client alert " Final IRS Regulations on Information Reporting under PPACA".
This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.
