IRS Proposes Reporting Requirements for Minimum Essential Coverage Providers

The IRS has released proposed requirements for the health insurance exchanges (Exchanges) and sponsors of minimum essential coverage (MEC) to report the months of coverage, premiums paid, and advance payments of the premium tax credit received both to the IRS and to the individuals involved. The proposal would implement provisions of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) and the Health Care and Education Reconciliation Act (HCERA) (P.L. 111-152). It is scheduled for publication in the Federal Register on September 9, 2013.

Reports and Informational Statements

The Exchanges or plan providers must issue informational statements to the individuals who were covered under the plan and returns to the IRS. The individual responsible for coverage for members of his or her household must receive informational statements from the Exchange or coverage provider identifying the individuals covered, the months of coverage, and the taxpayer identification number (TIN) of each covered individual, the premiums charged, and the amount of premium tax credit funds advanced. The same information would be provided to the IRS as returns.

Who Would Report

Exchanges would be required to make the reports concerning individual and family coverage purchased through the Exchanges; the issuers would have no responsibility to make reports as to this group. The Exchanges would not be required to report on small group coverage purchased through the state’s small business health options program (SHOP), however. Government agencies that provide MEC, such as the Medicaid or children’s health insurance program (CHIP) agency, would make reports on the individuals they cover.

The issuers of employer-sponsored coverage must make the reports concerning their enrollees. Employers that self-insure either on their own or in groups of affiliates must make the reports. Employers who delegate the responsibility to a third party administrator or other agent remain ultimately responsible for it. Multi-employer organizations or employee organizations that purchase coverage would make the required reports.

What Would Be Reported

Employers that furnish coverage to employees and dependents would report the following items to the IRS: (1) name, address, and taxpayer identification number (TIN) of each covered individual; (2) the months that each individual was covered; (3) the premiums charged; (4) the amounts paid by the employee and employer; (5) the advance payment of tax credits received; (6) the months that each individual was covered under the plan; and (7) whether the cover was purchased through the SHOP. If the employee is only required to contribute to the cost of dependent coverage, the amounts paid for coverage of the employee alone would not have to be disclosed.

Electronic Reporting

Covered individuals could agree to receive their reports electronically but they could not be required to do so. Employers who must make more than 250 reports would have to submit their reports to the IRS electronically. Paper reports could be used in other circumstances.

Due Dates

The reports would be due according to the calendar year regardless of the fiscal year used by the reporting entity for other purposes. Reports for a calendar year would be due by February 28 of the following year if filed on paper or by March 31 if filed electronically. No penalties would be imposed for a failure to file reports for coverage furnished in 2014; the rule would become effective for coverage years beginning January 1, 2015 or later.

When No Reports are Required

The issuer of individual and family coverage bought through the Exchange would not be required to report on that coverage, but issuers of small group coverage purchased through the SHOP would be. No reports would be made of: (1) individuals who were offered coverage but did not purchase it; or (2) coverage that supplements the MEC.