Thursday, June 9, 2016

Re: Information Reporting by Health Coverage Providers

The Affordable Care Act requires that every provider of minimum essential coverage report coverage information by filing an information return with the IRS and furnishing a statement to individuals.  This information is used by the IRS to administer, and individuals to show compliance with, the individual shared responsibility provisions.

The information reporting requirements were first effective for coverage provided in 2015. Any person that provides minimum essential coverage to an individual must report to the IRS and furnish statements to individuals, including the following:
  • Health insurance issuers, or carriers, for insured coverage,
  • Plan sponsors of self-insured group health plan coverage, and
  • The executive department or agency of a governmental unit that provides coverage under a government-sponsored program.

Minimum essential coverage includes eligible employer-sponsored coverage, including self-insured plans, COBRA coverage and retiree coverage. However, an employer that sponsors an insured health plan (a health plan that provides coverage by purchasing insurance from a health insurance issuer) does not report as a provider of health coverage. The health insurance issuer or carrier is responsible for reporting that health coverage.  However, if the employer is subject to the employer shared responsibility provisions as an applicable large employer, it is responsible for reporting information about the coverage it offers to its full-time employees

For a self-insured group health plan maintained by a single employer, the plan sponsor is the employer.  For a plan maintained by more than one employer that is not a multiemployer plan (as defined in ERISA) the plan sponsor is each participating employer.  For purposes of identifying the employer, the section 414 employer aggregation rules do not apply.

The information that a provider must report to the IRS includes the following:
  • The name, address, and employer identification number (EIN) of the provider;
  • The responsible individual’s name, address, and TIN, or date of birth if a TIN is not available.  If the responsible individual is not enrolled in the coverage, providers may, but are not required to, report the TIN of the responsible individual;
  • The name and TIN, or date of birth if a TIN is not available, of each individual covered under the policy or program and the months for which the individual was enrolled in coverage and entitled to receive benefits; and
  • For coverage provided by a health insurance issuer through a group health plan, the name, address, and EIN of the employer sponsoring the plan and whether the coverage is a qualified health plan enrolled in through the SHOP and the SHOP’s identifier.
The responsible individual generally is the person who enrolls one or more individuals, which may include him or herself, in minimum essential coverage.  The responsible individual may be the primary insured, employee, former employee, uniformed services sponsor, parent, or other related person named on the coverage application.

In an effort to streamline reporting, the IRS’s final rules omit data elements required by the statute, but that the IRS believes are not necessary to understanding coverage offered and provided. These include: the length of any waiting period; the employer’s share of the total allowed costs of benefits provided under the plan; and the amount of advance payments of the premium tax credit and cost-sharing reductions.

In addition to the information it reports to the IRS for each covered individual listed on the information return, a health coverage provider  must include a phone number for the provider’s designated contact person (if any) that the recipient of the statement can contact with questions about information on the statement.

A health coverage provider may not have the information necessary to determine whether an individual is exempt from the shared responsibility provision.  Therefore, to ensure complete and accurate reporting, providers must report for all their covered individuals.

A health coverage provider must file the information return and transmittal form with the IRS on or before February 28 (March 31, if filed electronically) of the year following the calendar year in which it provided minimum essential coverage to an individual.

Generally, a health coverage provider must file Form 1094-B and Form 1095-B (or other form that IRS designates, or a substitute form).  However, if the provider is also an applicable large employer as defined in the employer shared responsibility provisions under the Affordable Care Act and provides coverage to its employees through a self-insured group health plan, the provider must file Form 1094-C and Form 1095-C (or other form that IRS designates, or a substitute form), instead of Forms 1094-B and 1095-B, to report information with respect to its employees. To streamline and prevent duplication under each reporting requirement, applicable large employer with self-insured coverage completes separate sections of Form 1095-C to report the information required as an applicable large employer and as a health coverage provider.

A health coverage provider must also furnish a statement to the responsible individual on or before January 31 of the year following the calendar year in which minimum essential coverage is provided.  If the provider applies to the IRS in writing and shows good cause, the IRS may grant an extension of time up to 30 days for the provider to furnish the statement.

Penalties may apply to a provider that fails to file timely information returns, fails to include all the required information, or includes incorrect information on the return.  Penalty may also apply to a provider that fails to furnish timely the statement, fails to include all the required information, or includes incorrect information on the statement. If you have any questions related to your information reporting requirements, please call our office.

Reproduced with permission from CCH’s Client Letter, published and copyrighted by CCH Incorporated, 2700 Lake Cook Road, Riverwoods, IL 60015.

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