Why Self-Funded Plans Need to Request Dependent Social Security Numbers in 2014
The new ACA reporting requirements don’t go into effect until the 2015 plan year. And the first reports are not due to employees until early 2016. Just because these rules were delayed a year doesn’t mean employers have no action to take this year. Besides tracking employees hours this year for your look-back period, employers that sponsor self-funded plans must make reasonable efforts to obtain the social security numbers of all covered dependents this year.
Why you ask? The IRS recognized that there are some employees that are hesitant or just flat refuse to provide social security numbers for their dependents. Form 1095-B (or 1095-C for employers that are also large employers) requires employers to report the social security number of all individuals enrolled in its health plans. If an employer makes a “reasonable effort” to obtain the social security number of the covered dependents, including spouses and children, the employer won’t be penalized if its reports the birth date in place of the social security number. In order to be deemed to have made a “reasonable effort,” the employer must make two attempts to obtain the social security number. The first attempt must be made by December 31, 2014 and the second attempt must be made no later than December 31, 2015.
Therefore, you need to take action by the end of 2014 in order to ensure you are considered to have used a “reasonable effort” to obtain the social security number. If you haven’t already done so, look at plan records or check with your TPA to determine if you have any dependents with missing social security numbers. If you do, you need to send a request to the participant for the social security number by December 31, 2014. You don’t have to wait until December to get this request out, so consider doing it now so the task doesn’t get lost among your other year end compliance and holiday shopping. We recommend documenting the attempt and response (or lack of response) so that you have proof you’ve made a reasonable effort.