This blog was last updated on June 27, 2021

The Affordable Care Act (ACA) will present many challenges for businesses due to the new tax information reporting responsibilities. Some have pondered whether insurance companies will provide ACA reporting services to these businesses, especially for their self-insured clients.

Self-insured companies will be reporting as both insurers and employers. Therefore, they will be required to do more reporting than companies that are not self-insured. To assist them in their reporting process, the IRS has allowed self-insured companies to utilize just one form and one transmittal for their reporting, Form 1095-C and the 1094-C transmittal. This simplifies their process to meet reporting obligations under both Internal Revenue Code (IRC) section 6055 and 6056. However, processing and transmitting data for each individual employee and their dependents represents a significant increase in administrative duties.

Additionally, individuals will have questions about their own ACA tax information filings. It could be difficult to resolve the large number of requests for assistance, both for the employers and the insurance companies.

With companies that are self-insured, the administrative responsibilities of health care coverage, such as insurance billing and claims evaluation and processing, are taken care of by an insurance company. Given that ACA information reporting falls under the description of administrative duties for health care coverage, insurance companies have the option to offer expanded services related to ACA tax reporting. As such services are emerging, insurance companies that offer ACA reporting services now can place themselves ahead of their competition, thereby netting new clients who need assistance fulfilling these new reporting obligations.

If self-insured clients are given the option to have their insurance company shoulder the additional administrative demands related to ACA reporting, they can save both time and money. Without such services, they would need to perform internal restructuring to adapt to the new challenges, which can be costly.

Check out our education section for more about ACA reporting requirements for self-insured employers.