IRS requests Social Security numbers for insured dependents Email
Colorado Green NOW
Written by ALCC   
Tuesday, October 13, 2015 04:00 AM

Social Security numbersThe Affordable Care Act requires health insurance companies to provide a Taxpayer Identification Number for all insured individuals. This has caused concern among employers who are self-insured over collection of Social Security numbers (the most common Taxpayer Identification Number) from non-employees.

Why do I need Social Security Numbers for health care?
For the 2015 tax year, the Internal Revenue Service (IRS) issued a new reporting requirement related to the Affordable Care Act (ACA). Health insurance companies are required to provide Form 1095-B to its plan members and to the Internal Revenue Service. Individuals will need to use the form to prepare individual income tax returns. The law requires Social Security Numbers (SSNs) to be reported on Form 1095-B. 

While health insurance providers will provide form 1095-B to the IRS, covered individuals do not have to attach the form to their tax return. They will, however, use the form while preparing the return.

According to the IRS, the form “provides information needed to report on your income tax return that you, your spouse, and individuals you claim as dependents had qualifying health coverage (referred to as ‘minimum essential coverage’) for some or all months during the year. Individuals who do not have minimum essential coverage and do not qualify for an exemption may be liable for the individual shared responsibility payment.” In other words, individuals may be asked to pay if they can’t prove they have the required coverage.

What if I am a self-insured employer?
If an employer offers a self-funded health plan, it may fall to the employer (as the minimum essential coverage provider) to collect the SSNs. The provider must make a reasonable attempt (3 attempts is considered reasonable) to collect the information. If the covered individual does not comply, the provider may include a date of birth as identification. At that point, the covered individual may receive a notice from the IRS that unless they qualify for an exemption, they may be require to make the individual shared responsibility payment.

How can I verify that the SSNs provided are correct?
The Social Security Administration (SSA) does not recommend requesting a Social Security Card to prove the number is valid. Card styles have changed over the years, and it can be difficult to confirm that the card is valid. SSA offers a free online verification service and recommends that employers register for and use this service to verify that an SSN is correct. For covered dependents, however, this verification may not apply. [Note: registering with the SSA online verification service does not enroll your business in the E-Verify program.)

It is the responsibility of the insured individual, not the employer, to provide a valid, correct taxpayer identification number.

Does the IRS offer guidance for storing this information?
The IRS does not offer recommendations for storing information received for form 1095-B. If an employer is also self-insured and therefore required to submit the form (as the health insurance provider), the forms should be included with other submitted tax information on file. An insurer should use the same privacy and security methods used to secure other records. HIPAA compliance can be used as a guide.

For further reading on this topic:
Information Reporting by Providers of Minimum Essential Coverage (IRS)
FACT SHEET: Final Regulations Implementing Information Reporting for Employers and Insurers under the Affordable Care Act (ACA)

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