Part of the information being gathered by the IRS in Sections 6055 and 6056 reporting is the Taxpayer Identification Numbers (i.e., Social Security Numbers (SSN)) for all covered employees, spouses and dependents. Many employers do not regularly solicit this information from employees so the IRS has developed rules for how employers should request the information and when employers do not have to report the information.
Insurers and plan sponsors of self-insured plans must report SSNs for all covered individuals under Section 6055 and may provide dates of birth only after making “reasonable efforts” to obtain the SSN.
What efforts can be used to collect missing SSNs?
Efforts should be made in 2015 to collect any SSN of members and their dependents that may not already be on file even though reporting isn’t required until 2016. Consideration should be given to how to collect members’ SSNs (both employees and dependents) at the start of a plan’s 2015 plan year if this is not currently included in the enrollment process. If insurers and plan sponsors demonstrate that they made “reasonable efforts” to collect the SSN, but it was not provided, it will not be subject to a penalty for not providing the SSN of an individual.
Under the 6055 reporting rules, an initial attempt at collecting the SSN should be made at the time a relationship is established with the member. Collection attempts can be made by phone, in person or in writing (including asking for this information on an application). If the reporting entity is already in possession of an individual’s SSN for other purposes, they may use the SSN for 6055 reporting purposes.
At least three separate attempts will need to be made:
- If the SSN is not received, the first annual collection attempt is required by December 31 of the year in which the relationship with the member began. If the relationship begins in December, the first annual collection attempt will be required by January 31 of the following year.
- If the SSN is not received, the second collection attempt must be made by December 31 (or January 31) of the following year.
- If the SSN is still not received, the plan has acted in a responsible manner and does not need to continue efforts to collect the SSN and may use the date of birth of the individual.
For example, a reporting entity that makes an unsuccessful initial solicitation for a SSN in December 2015 must make the first annual solicitation by January 31, 2016. The second annual solicitation must be made by December 31, 2016, to have acted in a responsible manner. Assuming that request is also unsuccessful, the reporting entity has no further responsibility and would not be penalized if its section 6055 reporting submitted in early 2017 reported a date of birth in place of a SSN for the individual in question. The final IRS regulations clarify that the use of truncated SSNs is permitted (i.e., the last four digits of the SSN), rather than requiring the full nine-digit SSN.
Filers of Form 1095-B (statements furnished to recipients) may truncate the SSN (or other TIN, if applicable) of an individual receiving coverage by showing only the last four digits of the SSN (or other TIN) and replacing the first five digits with asterisks (*) or Xs. Truncation is not allowed on forms filed with the IRS. Similarly, the filer’s employer identification number (EIN) may be truncated on the statements furnished to individuals but not on forms filed with the IRS.
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