IRS issues draft forms for health care reporting

On July 24, 2014, the IRS released draft forms under the Patient Protection and Affordable Care Act’s (PPACA) (P.L. 111-148) that employers will use to report on health coverage that they offer to their employees. The draft forms are being provided to help stakeholders, including employers, tax professionals and software providers, prepare for the new reporting provisions and to invite comments from them. The IRS anticipates that draft instructions relating to the forms will be posted to in August. Both the forms and instructions will be finalized later this year. The forms are reproduced in this Report Letter on pages 5–12. The forms are: 1094-B, Transmittal of Health Coverage Information Returns, 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, 1095-A, Health Insurance Marketplace Statement, 1095-B, Health Coverage, 8941, Credit for Small Employer Health Insurance Premiums, 8962, Premium Tax Credit (PTC), and 8965, Health Coverage Exemptions.

Reporting requirements

Generally, the employer mandate will be in effect after 2015. Under transition relief, qualified employers with between 50 and 99 full-time employees are excused from share responsibility payments for 2015 (T.D. 9655, IRB. 2014-9, 541).

The PPACA requires, among other things, that applicable large employers (ALEs) file annual information reports about their workers, minimum essential health coverage, and the number of employees who receive any Code Sec. 36B premium assistance tax credits. The IRS issued final regulations in March 2014 on Code Sec. 6055 and Code Sec. 6056 reporting (T.D. 9660, IRB 2014-13, 842 and T.D. 9661, IRB 2014-13, 85).

The information required to be reported substantiates that an individual has minimum essential coverage through an eligible employer-sponsored plan. Employers must comply with the reporting rules to show compliance and be relieved from Code Sec. 4980H liability. In March, the Treasury Department explained that employers that are large enough to be subject to the employer responsibility provisions and that “self-insure” will complete both parts of the combined form for information reporting. Employers that are subject to employer responsibility provisions but do not “self-insure” will complete only the top section of the combined form.

Employer reporting is also essential to the administration of the Code Sec. 36B premium tax credit. The IRS will use the information reported to verify an individual’s eligibility for the credit. (IRS Statement on Health Coverage Information Reporting by Employers July 24, 2014.)

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