Final Regs Allow Combined Reporting By Applicable Large Employers And Health Insurance Providers

The Internal Revenue Service has issued two sets of final regulations regarding health insurance reporting. The first final rule provides regulations for information reporting by applicable large employer members under IRC Sec. 6056 concerning health care coverage they offer to their full-time employees. The second final rule concerns information reporting by providers of minimum essential health coverage (including employers with self-insured plans) under IRC Sec. 6055 regarding the type and period of coverage. Both rules were published in the March 10 Federal Register.

The big change from the proposed regulations is that combined reporting is permitted by applicable large employers reporting both as an applicable large employer under Sec. 6056, and as the provider of a self-insured plan under Sec. 6055.

Form 1095-C will be used by applicable large employer (ALE) members to satisfy both sets of reporting requirements, as applicable. An ALE member that sponsors a self-insured plan will report on Form 1095-C, completing both sections to report the information required under both Secs. 6055 and 6056. An ALE member that provides insured coverage also will report on Form 1095-C, but will complete only the section of Form 1095-C that reports the information required under Sec. 6056.

Sec. 6055 reporting entities that are not applicable large employer members or are not reporting as employers, such as health insurance issuers, sponsors of multiemployer plans, and providers of government-sponsored coverage, will report on Form 1095-B. These forms will be made available in draft form in the near future.

Applicable large employers also have the option of filing substitute forms, as long as they include all of the information required to be reported on Forms 1094-C and 1095-C or other forms the IRS designates and comply with applicable rules and guidance relating to substitute returns.

Aggregation rule for electronic reporting. The final regulations eliminate the aggregation rules found in the proposed regulations for purposes of determining whether a reporting entity has met the 250 return threshold for mandatory electronic. The proposed aggregation rule included Forms 1099 and W-2. As a result, Forms 1095-B and 1095-C will be required to be electronically filed only if the reporting entity is required to file at least 250 of the specific form.

TINs. The final regulations include some TIN changes for Sec. 6055 reporting. The final regulations clarify that TINs may be truncated on Sec. 6055 statements. Furthermore, although TINs are required for all covered individuals (whether employees or not), they are optional for responsible individuals not enrolled in coverage.

Effective dates. Both sets of final regulations apply for years beginning after Dec. 31, 2014, with voluntary compliance in 2014 encouraged. Reporting entities will not be subject to penalties for noncompliance in 2014 (including any requirement regarding the furnishing of statements to covered individuals in 2015 with respect to 2014). Accordingly, a reporting entity will not be subject to penalties if it first reports beginning in 2016 for 2015 (including the furnishing of statements to covered individuals).

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