What are the Employer’s responsibilities when it receives information about a SSN mismatch in response to complying with ACA Reporting requirements?

Under the Affordable Care Act (ACA), employers and group health plans are subject to certain IRS reporting requirements – commonly referred to as “Form 1095 filings”.  The information that must be reported to the IRS about covered employees includes: the name, address, and taxpayer identification number (TIN) (or social security number) of the covered individual and his or her dependents.  If a social security number (SSN) (or TIN) is not available, then the employer satisfies its requirements by submitting name and date of birth.

In some cases, employers may receive notifications from the IRS that an employee’s SSN does not match SSA’s records.  The IRS regulations recommend certain steps that employers should take to show good faith compliance with the ACA’s reporting requirements even when employers receive a no-match notice.  After taking those reasonable efforts, employers may provide a date of birth instead of a SSN for that employee. Those reasonable efforts include:

  1. Making an initial solicitation at the time the employment relationship with the individual is established, such as when an individual is hired;
  2. A first annual solicitation is made by December 31 of the year in which the relationship with the employee begins; and
  3. A second solicitation is made by December 31 of the following year.

If at that point, a SSN is not provided, the employer (the reporting entity) does not need to ask the employee for a social security number again.  See, IRS Notice 2015 – 68, Information Reporting on Minimum Essential Coverage; see also, Section 6055; Section 301.6724-1 (a)(1) and Section 301.6724-1(e) of the Income Tax Regulations.  The IRS will not impose penalties if the Employer can show it took these steps.  The IRS may, however, impose a penalty on the individual employee for not providing the SSN.

IRS regulations do not require that employers take any further action, except as outlined above.

What Actions Can Be Taken to Protect Workers’ Rights?

Unions and worker advocates should ensure that employers not take adverse action against employees after the employer receives notice that there is a mismatch or discrepancy with employees’ SSNs as a result of ACA reporting requirements.  Unions may consider negotiating collective bargaining language that requires employers to abide by the IRS regulations in responding to the mismatch and to take no adverse action against workers who are the subject of the mismatch. 

By Monica Guizar | July 5, 2016

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