What tax reporting is required for my StretchDollar benefits policy?
There are certain forms you must submit to the IRS and your employees to remain compliant.
Unfortunately, StretchDollar can’t complete or file these reporting forms on your behalf. (We wish we could!) But, they are not complex and your tax professional and/or payroll vendor should be familiar with this reporting and can help you complete it. We also provide detailed guidance below
Why are tax forms required?
Your company’s StretchDollar benefits are offered via Individual Coverage Health Reimbursement Accounts (ICHRAs for short.) ICHRAs are considered self-insured employer-sponsored health coverage under federal law.
Sponsors of self-insured health coverage have certain reporting obligations under the Affordable Care Act each year. Reporting requirements vary based on the size of the employer and/or sponsor.
- Employers who have 50 or more full-time employees on average, including full-time equivalent employees, have more reporting and shared responsibility provisions.
Small employers (i.e., employers who have less than 50 full-time employees on average throughout the year) have fewer reporting requirements than large employers.
This information only focuses on reporting requirements for small employers who have <50 full time employees.
What forms do you need to submit?
You must submit Forms 1094-B and 1095-B to the IRS.
- Form 1095-B provides information about the coverage your organization offers to employees. This form must be submitted for every employee who had an ICHRA during the prior calendar year.
Form 1094-B is a summary sheet that includes the total number of Form 1095-Bs submitted to the IRS.
You must also send employees Form 1095-B
- You must provide this form to all full-time employees, including those who were full-time for at least one month during the prior calendar year.
StretchDollar will provide you with some of the data you’ll need to complete 1095-B forms. We'll notify employer admins by email when your 1095-B form is posted to your portal.
Employers must provide this information to employees by March 11. These forms are due to the IRS by February 28 for paper filers and by March 31 if filing electronically.
Form 720
- You’ll also need to complete and submit Form 720, known as the Quarterly Federal Excise Tax Return, to the IRS no later than July 31 of the calendar year immediately following the last day of the policy year or plan year to which the fee applies.
For example, if your plan year covers January 1, 2024 through December 31, 2024 you’d need to file by July 31, 2025 for your 2024 plan year.)
All employers, regardless of size, are required to report and pay the Patient Centered Outcomes Research Institute (PCORI) via Form 720 for the average number of lives covered under the self-insured health coverage. This is another reporting obligation related to the Affordable Care Act.
Your tax preparer or advisor can assist you with completing this form and paying the PCORI fee.
Some tips for you!
Our StretchDollar tax reporting presentation has more helpful details about reporting requirements and links to each of the forms. Click here and check it out!
- 1095-B reporting data. We’ll post this to the Documents Center of your StretchDollar Benefits Portal in mid-January for any StretchDollar benefit enrollees in the prior calendar year.
Please note that this information should not be treated as legal or tax advice. StretchDollar does not provide guidance on legal or tax issues.
Employers are solely and completely responsible for compliance with any laws that apply to the Employer or the ICHRA Plan including, but not limited to, all required reporting for the ICHRA and determining the Employer’s status as an “Applicable Large Employer” under the Affordable Care Act. (ACA). Employers and employees should consult with their tax advisors and/or attorney(s) to confirm tax reporting requirements and obligations for their specific situation.