IRS Will Soon Issue Opinion Letters for Pre-Approved Defined Benefit Plans in the Third Remedial Amendment Cycle
Creditable Coverage Disclosure to CMS
Employers that sponsor group health plans have an annual obligation to report to employees and CMS whether the prescription drug coverage offered under the plan is creditable or non-creditable. The disclosure to employees is typically provided by October 14. The creditable coverage disclosure to CMS is required within 60 days after the start of the plan year. Accordingly, for calendar year plans, the disclosure is due by March 1, 2023.
The disclosure to CMS exists for health plans regardless of employer size and plan funding type (i.e., fully insured or self-insured), and it applies to church plans and federal, state and local government plans. For entities that are part of a controlled group and participate in the same plan, the requirement applies to the plan sponsor, not necessarily to each participating entity.
Employers may also want to review our recent FAQ explaining the disclosure to CMS. You may also download a copy of our publication Medicare Part D Disclosures: A Guide for Employers.
Upcoming ACA Reporting Deadlines for Forms 1094/1095
Annual ACA reporting deadlines for employers that sponsored group health plans in 2022 are approaching.
Applicable large employers (ALEs) with 50 or more full-time employees (FTEs), including full-time equivalent employees, in the prior year who sponsored group health plans (whether insured or self-insured) must comply with IRC Section 6056 reporting in early 2023. Specifically, ALEs must complete and distribute Form 1095-C to full-time employees by March 2, 2023. The form should detail whether the employee was offered minimum value, affordable coverage during 2022. The forms may be mailed, electronically delivered or delivered by hand (although proof of delivery in some manner is recommended).
Employers who sponsored a self-insured plan during 2022 must comply with Section 6055 reporting in 2023. Self-insured employers with 50 or more FTEs must complete Section III of Form 1095-C detailing which months the employee (and any applicable spouse and dependents) had coverage under the employer’s plan. If the self-insured employer has fewer than 50 FTEs, it must complete and distribute a Form 1095-B with such information. Again, the forms must be delivered to employees by March 2, 2023.
If the self-insured employer has fewer than 50 FTEs, an alternative is available to distributing Form 1095-B to individuals. These small employers are permitted to post a clear and conspicuous notice on their website of the availability of the document and the necessary contact information to request it. Any such request must be fulfilled within 30 days. This posting alternative is not available for Form 1095-C.
Employers must also file the forms with the IRS by February 28, 2023, if filing by paper, and March 31, 2023, if filing electronically. The filing must include the transmittal Form 1094-C (if filing Forms 1095-C) or Form 1094-B (if filing Forms 1095-B).