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IRS proposes regulations on ACA reporting requirements

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Tax Hot Topics: ACA reporting regulationsThe IRS proposed regulations (REG-103058-16) relating to information reporting of minimum essential coverage under Section 6055, which allows individuals to establish and the IRS to verify that the individuals were covered by minimum essential coverage during the year.

These proposed regulations would provide guidance only on the reporting requirements by insurance issuers in Form 1095-B, “Proceeds From Broker and Barter Exchange Transactions,” and on Part III of Form 1095-C, “Cancellation of Debt,” for large employers that sponsor self-insured health plans. Highlights of these proposed regulations include the following:
  • Issuers of catastrophic health plan coverage would be required to report catastrophic plan coverage on Form 1095-B, effective for coverage in 2017.
  • The employer identification number (EIN) of the employer sponsoring the health plan may be truncated on statements that health insurance issuers and carriers provide taxpayers, but not on statements provided to the IRS.  
  • If an individual is covered by more than one minimum essential coverage plan provided by the same reporting entity (employer or insurer), reporting is required for only one of the plans. If an individual is enrolled for a month in an employer-provided self-insured group health plan as well as a self-insured health reimbursement arrangement (HRA) provided by the same employer, the employer is required to report only one type of coverage to that individual.  
  • Reporting is not required for an individual’s minimum coverage to the extent that the individual is eligible for supplemental coverage only if the individual is also covered by other primary minimum essential coverage for which reporting is required. This applies to eligible employer-sponsored coverage only if the supplemental coverage is offered by the same employer that offers the primary coverage for which reporting is required. For example, if an employee is eligible for coverage under an HRA of an employer only if the employee accepts coverage under another group health plan, then only the primary group health plan is required to be reported.   
  • Employers are required to report an individual’s taxpayer identification number (TIN) (for example, Social Security number) on the statements. These proposed regulations provide procedures for employers to use to solicit missing TINs to avoid penalties for failure to report correct information on the statements.   

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