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By Ernie Redfern

| ACA Compliance Director, Integrity Data

Businesses that are self-insured must report a Social Security Number for every covered dependent they identify under Part III of IRS Form 1095-C. The clarity that a SSN is required – and that a birth date is not an optional equivalent – came in a tucked-away paragraph of a recent IRS notice.

The notice

Notice 2015-68, published October 13, 2015, states that a reporting entity must act “in a responsible manner in soliciting a TIN.” (TIN stands for Taxpayer Identification Number, a term that refers to Social Security Numbers in addition to tax-processing numbers for individuals who do not qualify for a SSN.)

According to this notice, which was released to provide additional ACA reporting guidance for businesses that are self-insured, failure to provide this information – a SSN – can be lead to a penalty for reporting incomplete information.

The misconception

Confusion has swirled among businesses that are self-insured about what identifying information they must report on a 1095-C for covered dependents:

Do you report the dependent’s birth date?

Do you report the dependent’s Social Security Number?

Isn’t it all right to use the dependent’s birth date in place of their SSN?

Misconception on this point came from initial ACA guidance by the IRS that either a SSN or a birth date could be used when filling out Part III of Form 1095-C.

The details

The penalty that Notice 2015-68 refers to for incomplete information may be waived only “if the failure is due to reasonable cause and not willful neglect; that is, if a reporting entity demonstrates that it acted in a responsible manner and that the failure is due to significant mitigating factors or events beyond the reporting entity’s control.”

A “responsible manner” of obtaining an individual’s SSN is defined as:

Soliciting the information when the coverage begins

A first annual solicitation by December 31 of the year the coverage began (or January 31 if the account is opened in December)

A second annual solicitation by December 31 of the following year

The call to action

If you are an employer that offers self-insured health coverage, please note – and advise colleagues – that dependents’ SSNs are required for 1095 reporting:

You will need to get and report SSNs for the covered dependents of your employees.

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