[Federal Register Volume 78, Number 174 (Monday, September 9, 2013)]
[Proposed Rules]
[Pages 54986-54996]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21783]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG-132455-11]
RIN 1545-BL31


Information Reporting of Minimum Essential Coverage

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking and notice of public hearing.

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SUMMARY: This document contains proposed regulations providing guidance 
to providers of minimum essential health coverage that are subject to 
the information reporting requirements of section 6055 of the Internal 
Revenue Code (Code), enacted by the Affordable Care Act. Health 
insurance issuers, certain employers, and others that provide minimum 
essential coverage to individuals must report to the IRS information 
about the type and period of coverage and furnish related statements to 
covered individuals. These proposed regulations affect health insurance 
issuers, employers, governments, and other persons that provide minimum 
essential coverage to individuals.

DATES: Written or electronic comments must be received by November 8, 
2013. Requests to speak and outlines of topics to be discussed at the 
public hearing scheduled for November 19, 2013, at 10 a.m., must be 
received by November 8, 2013.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-132455-11), Room 
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
132455-11), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC, or sent electronically via the Federal 
eRulemaking Portal at http://www.regulations.gov (IRS REG-132455-11).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Andrew Braden, (202) 622-4960; concerning the submission of comments 
and/or to be placed on the building access list to attend the public 
hearing, Oluwafunmilayo (Funmi) Taylor, (202) 622-7180 (not toll-free 
calls).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been submitted to the Office of Management and Budget in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)). Comments on the collection of information should be sent to 
the Office of Management and Budget, Attn: Desk Officer for the 
Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies to the Internal Revenue 
Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, 
Washington, DC 20224. Comments on the collection of information should 
be received by

[[Page 54987]]

November 8, 2013. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the IRS, including whether the 
information will have practical utility;
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    The collection of information in these proposed regulations is in 
Sec. Sec.  1.6055-1 and 1.6055-2. The collection of information will be 
used to determine whether an individual has minimum essential coverage 
under section 1501(b) of the Patient Protection and Affordable Care Act 
(26 U.S.C. 5000A(f)). The collection of information is required to 
comply with the provisions of section 6055 of the Code. The likely 
respondents are health insurers, self-insured employers or other 
sponsors of self-insured health plans, and governments that provide 
minimum essential coverage.
    The burden for the collection of information contained in these 
proposed regulations will be reflected in the burden on Form 1095-B or 
another form that the IRS designates, which will request the 
information in the proposed regulation.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by the Office of Management and Budget.

Background

    Beginning in 2014, under the Patient Protection and Affordable Care 
Act, Public Law 111-148 (124 Stat. 119 (2010)), and the Health Care and 
Education Reconciliation Act of 2010, Public Law 111-152 (124 Stat. 
1029 (2010)) (collectively, the Affordable Care Act), nonexempt 
individuals have the choice of maintaining minimum essential coverage 
(as defined in section 5000A(f)) or paying an individual shared 
responsibility payment with their income tax returns. Minimum essential 
coverage may be health insurance coverage offered in the individual 
market (such as a qualified health plan offered through an Affordable 
Insurance Exchange (Exchange, also known as a Marketplace)), an 
employer-sponsored plan, or a government-sponsored program. Section 
5000A(f)(1)(A) specifies that Medicare Part A, Medicaid, the Children's 
Health Insurance Program established under title XXI of the Social 
Security Act (42 U.S.C. 1397aa et seq.) (CHIP), TRICARE, certain health 
care programs for veterans and other individuals under chapter 17 or 18 
of Title 38 U.S.C., coverage for Peace Corps volunteers under 22 USC 
2504(e), and coverage under the Nonappropriated Fund Health Benefits 
Program under section 349 of Public Law 103-337, are government-
sponsored programs that qualify as minimum essential coverage.
    Section 1401 of the Affordable Care Act enacted section 36B, 
allowing certain taxpayers a refundable premium tax credit that will 
make minimum essential coverage in qualified health plans offered in 
the individual market through an Exchange more affordable.
    Section 1502 of the Affordable Care Act enacted section 6055 
regarding information reporting by any person that provides minimum 
essential coverage to an individual. Section 6055(b)(1)(B) requires 
providers of minimum essential coverage to report (1) the name, 
address, and taxpayer identification number (TIN) of the primary 
insured, (2) the name, dates of coverage, and TIN of each individual 
covered under a policy, (3) whether health insurance coverage is a 
qualified health plan offered through an Exchange, (4) for a qualified 
health plan, the amount of any advance payments of the premium tax 
credit under section 1412 of the Affordable Care Act and cost-sharing 
reductions under section 1402 of the Affordable Care Act, and (5) other 
information the Secretary requires.
    Section 6055(b)(2) requires, for coverage through an employer's 
group health plan, reporting (1) the name, address, and employer 
identification number (EIN) of the employer maintaining the plan, (2) 
the portion of the premium (if any) paid by the employer, and (3) any 
other information that the Secretary requires for administering the 
credit under section 45R (the tax credit for employee health insurance 
expenses of small employers).
    Section 6055(c) directs a person filing an information return under 
section 6055 to provide a written statement to each individual listed 
on the return that shows the name, address, and contact phone number of 
the reporting entity and information reported to the IRS for that 
individual. The statement must be furnished to the individual by 
January 31 of the year following the coverage year.
    The information reported under section 6055 will allow taxpayers to 
establish and the IRS to verify that the taxpayers were covered by 
minimum essential coverage and their months of enrollment during a 
calendar year.
    Under section 6724(d), as amended by the Affordable Care Act, a 
reporting entity that fails to comply with the filing and statement 
furnishing requirements of section 6055 may be subject to penalties for 
failure to file a correct information return (section 6721) and failure 
to furnish correct payee statements (section 6722). However, these 
penalties may be waived if the failure was due to reasonable cause and 
not to willful neglect (section 6724(a)).
    Section 1514 of the Affordable Care Act enacted section 6056, which 
requires applicable large employers (generally employers with 50 or 
more full-time employees) to report to the IRS information about the 
coverage that they offer to their full-time employees and requires them 
to furnish related statements to employees.
    Notice 2012-32 (2012-20 IRB 910) requested public comments on 
issues to be addressed in regulations under section 6055. In addition, 
Notice 2012-33 (2012-20 IRB 912) requested public comments on issues to 
be addressed in regulations under section 6056. As described later in 
this preamble, the written comments in response to Notice 2012-32 and 
other written comments have been considered in connection with the 
development of these proposed regulations.
    As discussed in Notice 2013-45 (2013-31 IRB 116), Treasury and the 
IRS have engaged in dialogue with stakeholders in an effort to simplify 
section 6055 (and section 6056) reporting consistent with effective 
implementation of the law. This process has included discussions with 
stakeholders representing a wide range of interests to assist in the 
consideration of effective information reporting rules that will be as 
streamlined, simple, and workable as possible. The effort to develop 
these proposed information reporting rules has reflected a considered 
balancing of the importance of (1) providing individuals the 
information to complete their tax returns accurately, including with 
respect to the individual responsibility provisions and eligibility for 
the premium tax credit, (2) minimizing cost and administrative tasks 
for the reporting entities and individuals, and (3) providing the IRS 
with information needed for effective and efficient tax administration. 
As noted elsewhere in

[[Page 54988]]

this preamble, the proposed regulations will be the subject of public 
comments, including comments that are specifically invited regarding 
particular issues identified in the preamble.
    Notice 2013-45 provides as transition relief that section 6055 
information reporting will be optional for 2014. The IRS will not 
impose penalties for failure to timely and accurately report under 
section 6055 for coverage in 2014. As stated in Notice 2013-45, the IRS 
encourages voluntary section 6055 reporting for coverage in 2014.

Explanation of Provisions and Summary of Comments

1. Persons Subject to Information Reporting Requirement

a. Plans in the individual market
    Under section 36B(f)(3) and Sec.  1.36B-5, an Exchange must report 
information relating to enrollment in qualified health plans in the 
individual market to the IRS and taxpayers. This information includes 
the period coverage was in effect, the names and TINs of each 
individual covered, the amount of advance credit payments relating to 
the coverage, and the amount of premiums for the coverage. This 
reporting facilitates compliance with and administration of the premium 
tax credit under section 36B. A commenter suggested that issuers of 
qualified health plans should not be required to report under section 
6055 regarding minimum essential coverage that they provide in the 
individual market through the Exchange because the Exchange reporting 
provides the IRS and taxpayers with the necessary information about 
this coverage.
    In response to this comment and to reduce the burden associated 
with reporting under section 6055, the proposed regulations provide 
that issuers are not required to submit section 6055 information 
returns for coverage under a qualified health plan in the individual 
market enrolled in through an Exchange. For individuals enrolled in 
this coverage, the IRS and individuals will receive information 
necessary to administer or comply with the individual shared 
responsibility provision through information reporting by Exchanges 
under section 36B(f)(3). Issuers must report, however, on qualified 
health plans in the small group market enrolled in through the Small 
Business Health Options Program (SHOP), because annual information 
reporting by Exchanges under section 36B(f)(3) does not include these 
plans.
b. Employer-sponsored Insured Group Health Plans
    Commenters recommended that the proposed regulations require 
employers rather than health insurance issuers to report under section 
6055 for insured coverage under an employer-sponsored group health 
plan. The commenters suggested that employers have more direct access 
to information required to be reported for an employee enrolled in a 
group health plan.
    Because section 6055(a) requires reporting by the entities 
providing the coverage, which for insured coverage is the issuer, the 
proposed regulations provide that health insurance issuers are 
responsible for reporting under section 6055 for all insured coverage, 
except coverage under certain government-sponsored programs (such as 
Medicaid and Medicare) that provide coverage through a health insurance 
issuer and coverage under qualified health plans in the individual 
market enrolled in through an Exchange.
    Reporting entities are permitted to use third parties to facilitate 
filing returns and furnishing statements to comply with reporting 
requirements, including those under section 6055. These arrangements do 
not, however, transfer the potential liability for failure of the 
reporting entity to report and furnish under the regulations.
    A party preparing returns or statements required under section 6055 
that is a tax return preparer will be subject to the requirements that 
generally apply to return preparers.
c. Self-insured Group Health Plans
    The proposed regulations provide that sponsors of self-insured 
health coverage are responsible for reporting under section 6055. The 
proposed regulations identify the employer as the plan sponsor and 
reporting entity for a self-insured group health plan established or 
maintained by a single employer. This rule is consistent with section 
3(16)(B)(i) of the Employee Retirement Income Security Act of 1974 
(ERISA), which states that the term ``plan sponsor'' means the employer 
in the case of an employee benefit plan established or maintained by a 
single employer.
    Commenters noted that individuals may be covered under a self-
insured arrangement that is a multiemployer plan and offered 
suggestions for identifying the entity responsible for reporting. Some 
commenters stated that employers that participate in a multiemployer 
plan do not have access to the information required to be reported 
under section 6055 and that the multiemployer plan or its 
administrator, for example, the joint board of trustees, should report 
for the participating employers. Another commenter suggested that labor 
unions report for multiemployer plans. Other commenters asserted that a 
plan's administrator or trustees generally are in the best position to 
report minimum essential coverage funded under a collective bargaining 
agreement unless the plan is funded by a single employer. A commenter 
asserted that each participating employer should be responsible for 
reporting under section 6055 for a multiple employer welfare 
arrangement (MEWA) under section 3(40) of ERISA (29 U.S.C. 1002(40)).
    In response to these comments, the proposed regulations identify 
the sponsor and reporting entity for various types of self-insured 
arrangements (for example, the joint board of trustees for a 
multiemployer plan). For these purposes, the section 414 employer 
aggregation rules do not apply. Accordingly, a self-insured group 
health plan or arrangement covering employees of related corporations 
is treated as sponsored by more than one employer and each employer 
must report for its employees. However, one member of the group may 
assist the other members by filing returns and furnishing statements on 
behalf of all members.
    Section 6055(d) provides that an appropriately designated person 
may report under section 6055 on behalf of a government employer. 
Accordingly, the proposed regulations allow a government employer 
providing self-insured coverage for its employees to report under 
section 6055 on its own behalf or to designate as the reporting entity 
another governmental unit or agency or instrumentality of a 
governmental unit that is part of or related to the same governmental 
unit as the government employer. If the designation is made before the 
filing deadline and the designee accepts it, the designated 
governmental unit, agency, or instrumentality is the sponsor 
responsible for section 6055 reporting. Comments are requested on 
issues specific to government employer plans and arrangements.
    As noted, section 6056 requires applicable large employers to 
report information about the coverage that they offer to their full-
time employees and to furnish related statements to employees. 
Commenters suggested that applicable large employers with self-insured 
health plans that must report under both sections 6055 and 6056 should 
be allowed to combine that reporting.
    The general rules described in the proposed regulations assume 
separate

[[Page 54989]]

reporting, but include other rules that reduce duplicative reporting 
and otherwise simplify reporting. For example, the proposed regulations 
allow the use of substitute forms and statements to individuals, which 
may permit self-insured health plans to furnish a single substitute 
statement to covered individuals for both sections 6055 and 6056.
    In addition, the preamble to proposed regulations under section 
6056 advises that the IRS and the Treasury Department are considering 
permitting applicable large employers with self-insured plans that 
provide mandatory, minimum value coverage to employees, and offer that 
coverage to spouses and dependents, all with no employee contribution, 
to forgo providing section 6056 statements to those covered employees. 
Because the section 6055 return would provide the individual taxpayers 
information to accurately file the taxpayers' income tax returns, and 
would provide the IRS the information concerning those employees to 
administer the premium tax credit and employer shared responsibility 
provisions, Treasury and the IRS are considering whether for those 
employees the employer could file and furnish only the return required 
under section 6055 and include a code on the employees' Forms W-2.
    Comments are requested on other ways to simplify and combine 
reporting.
d. Foreign Employers That Provide Minimum Essential Coverage
    Section 6055(b)(2)(A) requires that reporting for coverage under a 
group health plan include the employer's EIN. A commenter noted that a 
foreign employer may provide minimum essential coverage but may not 
have an EIN. Comments are requested on rules for reporting by foreign 
employers without EINs that sponsor self-insured plans and on any other 
issues specific to reporting coverage provided by foreign employers.
e. Government-Sponsored Programs
    The proposed regulations provide that the executive department or 
agency of a governmental unit that provides coverage under a 
government-sponsored program (within the meaning of section 
5000A(f)(1)(A)) is responsible for reporting under section 6055. For 
example, the Department of Defense is responsible for reporting 
coverage under the TRICARE program. The proposed regulations identify 
the State agency that administers the Medicaid or CHIP program, rather 
than the Department of Health and Human Services, as the reporting 
entity for these programs. Additionally, under the proposed 
regulations, the responsible government department or agency, and not 
the issuer, is the reporting entity for coverage under a government-
sponsored program provided through a health insurance issuer (such as 
some Medicaid, CHIP, and Medicare programs). Comments are requested on 
issues specific to reporting coverage under government-sponsored 
programs.
f. Other Arrangements Designated as Minimum Essential Coverage
    Section 5000A(f)(1)(E) provides that the Secretary of Health and 
Human Services (HHS), in coordination with the Secretary of the 
Treasury, may recognize other health benefits coverage as minimum 
essential coverage. On July 1, 2013, HHS published final regulations 
designating certain coverage as minimum essential coverage and 
outlining substantive and procedural requirements that other types of 
coverage must fulfill to be recognized as minimum essential coverage. 
Patient Protection and Affordable Care Act: Exchange Functions: 
Eligibility for Exemptions; Miscellaneous Minimum Essential Coverage 
Provisions, 78 FR 39494 (HHS MEC regulations). These regulations 
designate as minimum essential coverage (1) self-funded student health 
coverage for plan or policy years beginning on or before December 31, 
2014, (2) Refugee Medical Assistance supported by the Administration 
for Children and Families, (3) Medicare Advantage plans, and (4) State 
high risk pools for plan or policy years beginning on or before 
December 31, 2014.
    The proposed rule that designates the government department or 
agency as the reporting entity for coverage under a government-
sponsored program provided through a health insurance issuer applies to 
Medicare Advantage plans. Comments are requested on appropriate rules 
for identifying the reporting entity for other arrangements recognized 
as minimum essential coverage under section 5000A(f)(1)(E).

2. Information Required To Be Reported

a. In General
    The proposed regulations provide that the section 6055 information 
return must include the name of each individual enrolled in minimum 
essential coverage and the name and address of the primary insured or 
other related person (for example, a parent or spouse) who submits the 
application for coverage (the responsible individual). The proposed 
regulations use the term responsible individual rather than the term 
primary insured because minimum essential coverage may not be insured 
coverage (for example, health coverage provided by the Department of 
Veterans Affairs). The return also must report the TIN and months of 
coverage for each individual who is covered under the policy or program 
and other information specified in forms, instructions, or published 
guidance, see Sec. Sec.  601.601(d) and 601.602. For employer-provided 
coverage, the proposed regulations require reporting the name, address, 
and EIN of the employer maintaining the plan and whether coverage was 
enrolled in through the SHOP.
    As part of the effort to minimize the cost and administrative steps 
associated with the reporting requirements, the proposed regulations do 
not require reporting information that would not be needed by 
individual taxpayers or the IRS for purposes of administering the 
individual shared responsibility provisions or the credit for small 
employers. Accordingly, the proposed regulations do not require 
reporting the portion of the premium paid by an employer, which the IRS 
does not need to determine if an individual is covered by minimum 
essential coverage. The proposed regulations require reporting the 
months of coverage rather than the specific dates of coverage, because 
minimum essential coverage applies month by month. The proposed 
regulations do not require reporting the amount of any cost-sharing 
reductions, which are not administered by the IRS. Finally, the 
proposed regulations do not require reporting the amount of advance 
payments or on coverage in a qualified health plan in the individual 
market enrolled in through an Exchange, since in both cases this 
information is reported to the IRS and provided to individuals by the 
Exchanges under section 36B(f)(3).
b. Identifying Information
    Health insurance issuers and employers with self-funded plans 
expressed concern that they do not typically collect TINs from 
dependents covered under their policies and that they may have 
difficulty obtaining TINs for some covered individuals. Other 
commenters suggested allowing alternative means of identifying 
individuals, such as unique enrollee identification numbers similar to 
the method used by the Massachusetts Health Connector (the State-based 
exchange), or allowing reporting without TINs for individuals who 
enroll in coverage but decline to provide a TIN. Some commenters 
suggested simplifying reporting requirements for dependents or 
providing alternatives in

[[Page 54990]]

reporting TINs for new beneficiaries and others who may not provide 
TINs at the time of enrollment.
    The proposed regulations adopt TIN reporting, consistent with the 
statute. Section 6055 reporting allows individuals to confirm their 
coverage and the IRS to verify that coverage without the need to 
contact the individuals. The use of TINs to cross-check individuals 
against coverage months is the most efficient way for individuals and 
the IRS to avoid the need for follow-up. Accordingly, covered 
individuals have an interest in providing TINs to reporting entities.
    Federal tax records for individuals for all purposes are maintained 
by TIN and individual taxpayers identify themselves on their returns by 
TIN. Establishing another method of identifying individuals for 
sections 5000A and 6055 purposes would require the IRS to create, and 
taxpayers to adapt to, an entire parallel identification system solely 
for this purpose.
    While section 6055 and the proposed regulations require TINs for 
administering section 5000A, reporting entities that make reasonable 
efforts to collect TINs but do not receive them will not be subject to 
penalties under sections 6721 and 6722 for failure to timely and 
accurately report. In particular, section 6055 reporting is governed by 
the same procedures, limitations, and protections as other information 
reporting that requires obtaining and reporting TINs. Section 6724 and 
the regulations under that section waive penalties on reporting 
entities for a reasonable failure to include correct TIN information on 
a return or statement, including those required under section 6055. 
Penalties are waived if the reporting entity demonstrates that it acted 
in a responsible manner both before and after the failure occurred, and 
that the failure was due to significant mitigating factors or events 
beyond the reporting entity's control. In general, a reporting entity 
acts responsibly in attempting to solicit a TIN if after an initial, 
unsuccessful request for a TIN (for example, at the time of 
enrollment), the reporting entity makes two consecutive annual TIN 
solicitations. No section 6724 penalty is imposed unless the reporting 
entity fails to make the two additional solicitations. Accordingly, 
section 6055 reporting entities will not be unduly penalized for 
failing to report a TIN.
    As a backstop to reporting a TIN, the proposed regulations allow 
reporting entities to report date of birth if a TIN is not available. 
This alternative should not be used, however, unless the reporting 
entity has made reasonable efforts to obtain the information by 
requesting that a covered individual provide the TIN.
    A commenter requested that the proposed regulations provide rules 
authorizing reporting entities to request TINs. This authority exists 
under section 6109(a)(2) and Sec.  301.6109-1(b)(1) of the Procedure 
and Administration Regulations, which require individuals to furnish 
TINs to persons that must file information returns.
    A commenter noted that issuers and employers may have difficulty 
obtaining overseas addresses for individuals living abroad. The 
proposed regulations provide that only the last known address for the 
responsible individual must be reported.
c. Coverage Dates
    For purposes of section 5000A, an individual who has coverage on 
any day in a month is treated as having minimum essential coverage for 
the entire month. See proposed Sec.  1.5000A-1(b) (78 FR 7314). As a 
result, the specific coverage dates are not necessary for administering 
and complying with rules relating to minimum essential coverage. 
Accordingly, the proposed regulations do not require reporting of the 
specific dates of coverage. Instead, the proposed regulations generally 
require reporting of the months during which an individual is treated 
as having minimum essential coverage.
    A commenter noted that coverage dates may be inaccurate because 
coverage may be terminated or reinstated after the reporting date for 
periods occurring before the reporting date. Under section 6724 and the 
regulations under that section, the IRS may waive penalties if there is 
reasonable cause for the failure to correct an information return for 
retroactive terminations or reinstatements that are determined after 
the calendar year in which coverage was terminated or reinstated.
    A commenter recommended permitting separate returns or creating 
special forms to report coverage for individuals who change their 
coverage during the year to a different health plan with the same 
issuer. Although the proposed regulations do not adopt a rule 
addressing this situation, additional procedures that are responsive to 
this comment may be provided in IRS forms and instructions, see Sec.  
601.602.
    A commenter noted that employers face challenges in determining 
coverage dates for employees and dependents, including seasonal and 
temporary workers whose term of employment changes during the year. The 
commenter recommended that the rules allow reporting an individual's 
enrollment in minimum essential coverage as of a fixed date each year 
to accommodate an employer's administrative, payroll, and recordkeeping 
procedures. The individual responsibility payment under section 5000A 
applies to individuals on a monthly basis, so reporting based on one 
day during the year would not be sufficient. Additionally, varying 
reporting dates would be difficult to administer and would produce 
information less useful to taxpayers, who generally file their tax 
returns and must determine their coverage based on a calendar year. 
Accordingly, the proposed regulations do not adopt this suggestion. 
Comments are welcome on potential alternative ways to address the 
challenges associated with determining coverage dates when employment 
changes.
d. Supplemental Coverage Arrangements
    A commenter asked whether an employer and an issuer must coordinate 
section 6055 reporting for an employer-sponsored group health plan that 
consists of an insured high-deductible health plan (HDHP) and 
additional health benefits provided through a contribution to a health 
savings account. Health savings accounts are not minimum essential 
coverage, and therefore section 6055 reporting is not required for 
them. Additionally, the proposed regulations provide that reporting is 
not required for arrangements such as health reimbursement arrangements 
that supplement minimum essential coverage.

3. Time and Manner of Filing

a. Form of Return
    The proposed regulations provide that the return under section 6055 
may be made on Form 1095-B or another form the IRS designates, or on a 
substitute form. A substitute form must comply with revenue procedures 
or other published guidance, see Sec.  601.601(d)(2), that apply to 
substitute forms. The proposed regulations require that information 
returns be submitted to the IRS with a transmittal form, Form 1094-B. 
In accordance with usual procedure, these forms will be made available 
in draft form at a later date.
b. Time for Filing Returns
    The proposed regulations provide for reporting entities to file the 
return and

[[Page 54991]]

transmittal form on or before February 28 (or March 31 if filed 
electronically) of the year following the calendar year in which they 
provided minimum essential coverage. Commenters suggested that the 
proposed regulations provide different reporting deadlines for fiscal 
year health plans to avoid calendar year reporting of data from 
multiple plan years. Since most individuals file calendar year returns, 
permitting fiscal year reporting would interfere with return 
preparation and processing for individuals potentially subject to the 
section 5000A individual shared responsibility payment. Therefore, the 
proposed regulations do not adopt this comment.
c. Electronic Reporting
    Commenters recommended permitting electronic reporting under 
section 6055. Section 6011(e) and Sec.  301.6011-2 require high-volume 
filers (those who file 250 or more returns during the calendar year) to 
file electronically. The proposed regulations provide that these 
electronic filing requirements apply to information returns under 
section 6055, but do not limit electronic filing to high-volume filers. 
Accordingly, any reporting entity may file electronically under section 
6055.

4. Combined Reporting

    As discussed earlier in this preamble, applicable large employers 
that provide minimum essential coverage on a self-insured basis are 
subject to the reporting requirements of sections 6055 and 6056, as 
well as the requirement under section 6051 to file Form W-2, Wage and 
Tax Statement, showing wages paid to employees and taxes withheld. 
Notices 2012-32 and 2012-33 requested comments on how to minimize 
duplication in reporting under these provisions.
    Several commenters recommended that the regulations allow combined 
information reporting under sections 6055 and 6056 for applicable large 
employers that sponsor self-insured group health plans and must report 
under both sections. Other commenters recommended that employers be 
permitted to use a single information return to report under sections 
6051 and 6055, for example by adding the information required under 
section 6055 to Form W-2.
    As discussed elsewhere in this preamble, these proposed regulations 
seek to simplify reporting and reduce duplication through a number of 
approaches. In particular, the proposed regulations provide that 
issuers need not report under section 6055 for individual market 
qualified health plans enrolled in through an Exchange. The proposed 
regulations also provide relief from the requirement to report several 
items of information that are unnecessary for tax administration or are 
available from other reporting, and they allow the use of substitute 
forms and statements to individuals, which, under future guidance, may 
include furnishing a single substitute statement to covered individuals 
for both sections 6055 and 6056.
    Accordingly, while the rules for section 6055 reporting in the 
proposed regulations do not assume full combined reporting under 
sections 6055, 6056 and 6051, they reflect other means of avoiding 
duplication and simplifying reporting. We continue to seek comments on 
other ways to streamline the reporting methods that would be 
permissible under the statute.

5. Statements Furnished to Individuals

    The proposed regulations provide that a reporting entity must 
furnish a statement to the covered individual providing the policy 
number and the name, address, and a contact number for the reporting 
entity, and the information required to be reported to the IRS. The 
proposed regulations permit substitute statements that include the 
information required to be shown on the return filed with the IRS and 
comply with applicable requirements in published guidance relating to 
substitute statements. See Sec.  601.601(d)(2) of this chapter. A 
substitute statement that includes the information required by both 
sections 6055 and 6056 in a single statement may be permitted by future 
guidance.
    Commenters recommended permitting electronic delivery of statements 
to individuals. A commenter suggested that the regulations provide 
rules for electronic delivery of statements to individuals that are 
similar to the rules under section 2715 of the Public Health Service 
Act for providing a summary of benefits and coverage. The commenter 
suggested that these reporting regulations permit the furnishing of one 
electronic statement per home address rather than multiple statements 
per household. Another commenter requested guidance on procedures when 
an email notice is returned due to an incorrect address.
    The proposed regulations permit electronic delivery of statements 
to individuals if the recipient consents. In response to concerns about 
the need to furnish a statement to each individual, the proposed 
regulations also permit furnishing only one statement per address. 
Comments are requested on whether and under what circumstances the 
regulations should direct reporting entities to provide a statement to 
another individual (who may, for example, need the statement to 
determine his or her tax liability).
    Commenters expressed concern about protecting the privacy of 
individuals who provide TINs and about disclosure of the TINs to other 
parties. The regulations provide that section 6055 information 
reporting will be included in the IRS truncated TIN program. 
Accordingly, to protect the privacy of covered individuals, statements 
furnished to individuals under section 6055 are not required to 
disclose their complete TINs.
    A commenter recommended that the statement to individuals should 
explain minimum essential coverage and advise taxpayers that they may 
be subject to a penalty for months in which they do not have minimum 
essential coverage. The proposed regulations do not include rules 
addressing educational content in the statement. However, information 
on the section 5000A individual shared responsibility payment may be 
included in IRS forms, instructions, and publications.

6. Penalties

    Commenters recommended providing procedures for correcting errors 
in reporting and a safe harbor from penalties for an issuer that fails 
to report information that another entity fails to provide to the 
issuer. The proposed regulations provide that the provisions of section 
6724(a) providing relief for a failure due to reasonable cause apply to 
reporting under section 6055. Because the procedures described in Sec.  
301.6721-1(b), which provide for reduced penalties for reporting errors 
that are timely corrected, will apply to corrections of errors in 
reporting under section 6055 that are not due to reasonable cause, the 
proposed regulations do not prescribe separate rules for correcting 
errors.

Proposed Effective/Applicability Date

    These regulations are proposed to apply for calendar years 
beginning after December 31, 2014. Consistent with Notice 2013-45, 
reporting entities will not be subject to penalties for failure to 
comply with the section 6055 reporting requirements for coverage in 
2014, which would have resulted in reporting in 2015 and furnishing 
statements to covered individuals in 2015. 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 in 2016 with respect to

[[Page 54992]]

2015. Taxpayers are encouraged, however, to voluntarily comply with 
section 6055 information reporting for minimum essential coverage 
provided in 2014 by applying these regulations once finalized.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866, as supplemented by Executive Order 13563. Therefore, a 
regulatory assessment is not required. It has also been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
does not apply to these regulations.
    It is hereby certified that these regulations will not have a 
significant economic impact on a substantial number of small entities. 
This certification is based on the fact that the information collection 
required under these regulations is imposed under section 6055. 
Consistent with the statute, the proposed regulations require a person 
that provides minimum essential coverage to an individual to file a 
return with the IRS reporting certain information and to furnish a 
statement to the responsible individual who enrolled an individual or 
family in the coverage. These regulations primarily provide the method 
of filing and furnishing returns and statements under section 6055. 
Moreover, the proposed regulations attempt to minimize the burden 
associated with this collection of information by limiting reporting to 
the information that the IRS will use to verify minimum essential 
coverage and administer tax credits.
    Based on these facts, a Regulatory Flexibility Analysis under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required.
    Pursuant to section 7805(f) of the Code, this notice of proposed 
rulemaking has been submitted to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on its impact on small 
business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any comments that are submitted timely 
to the IRS as prescribed in this preamble under the ADDRESSES heading. 
The IRS and Treasury Department request comments on all aspects of the 
proposed rules. All comments will be available at www.regulations.gov 
or upon request.
    A public hearing has been scheduled for November 19, 2013, at 10 
a.m., in the auditorium, Internal Revenue Building, 1111 Constitution 
Avenue NW., Washington, DC. Due to building security procedures, 
visitors must enter at the Constitution Avenue entrance. All visitors 
must present photo identification to enter the building. Because of 
access restrictions, visitors will not be admitted beyond the immediate 
entrance more than 30 minutes before the hearing starts. For 
information about having your name placed on the building access list 
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section 
of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit written or 
electronic comments by November 8, 2013, an outline of topics to be 
discussed and the time to be devoted to each topic by (signed original 
and eight (8) copies by November 8, 2013. A period of 10 minutes will 
be allotted to each person for making comments.
    An agenda showing the scheduling of the speakers will be prepared 
after the deadline for receiving outlines has passed. Copies of the 
agenda will be available free of charge at the hearing.

Drafting Information

    The principal authors of these proposed regulations are Andrew 
Braden and Frank W. Dunham III of the Office of Associate Chief Counsel 
(Income Tax and Accounting). However, other personnel from the IRS and 
the Treasury Department participated in the development of the 
regulations.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 301 are proposed to be amended as 
follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by adding 
entries in numerical order to read in part as follows:

    Authority:  26 U.S.C. 7805 * * *

    Sections 1.6055-1 and 1.6055-2 also issued under 26 U.S.C. 6055.

0
Par. 2. Sections 1.6055-1 and 1.6055-2 are added to read as follows:


Sec.  1.6055-1  Information reporting for minimum essential coverage.

    (a) Information reporting requirement. Every person that provides 
minimum essential coverage to an individual during a calendar year must 
file an information return and a transmittal on forms prescribed by the 
Internal Revenue Service.
    (b) Definitions--(1) In general. The definitions in this paragraph 
(b) apply for purposes of this section.
    (2) Affordable Care Act. The term Affordable Care Act refers to the 
Patient Protection and Affordable Care Act, Public Law 111-148 (124 
Stat. 119 (2010)), and the Health Care and Education Reconciliation Act 
of 2010, Public Law 111-152 (124 Stat. 1029 (2010)), and amendments to 
those acts.
    (3) ERISA. The term ERISA means the Employee Retirement Income 
Security Act of 1974, as amended (29 U.S.C. 1001 et seq.).
    (4) Exchange. Exchange has the same meaning as in 45 CFR 155.20.
    (5) Government employer. The term government employer means an 
employer that is a governmental unit or an agency or instrumentality of 
a governmental unit.
    (6) Governmental unit. The term governmental unit refers to the 
government of the United States, any State or political subdivision of 
a State, or any Indian tribal government (as defined in section 
7701(a)(40)) or subdivision of an Indian tribal government (as defined 
in section 7871(d)).
    (7) Agency or instrumentality of a governmental unit. [Reserved]
    (8) Minimum essential coverage. Minimum essential coverage is 
defined in section 5000A(f) and regulations issued under that section.
    (9) Qualified health plan. The term qualified health plan has the 
same meaning as in section 1301(a) of the Affordable Care Act (42 
U.S.C. 18021(a)).
    (10) Reporting entity. A reporting entity is any person that must 
report, under section 6055 and this section, minimum essential coverage 
provided to an individual.
    (11) Responsible individual. A responsible individual is a primary 
insured, employee, former employee, uniformed services sponsor, parent, 
or other related person named on an application who enrolls one or more 
individuals in minimum essential coverage.
    (12) Taxpayer identifying number. The term taxpayer identifying 
number

[[Page 54993]]

(TIN) has the same meaning as in section 7701(a)(41).
    (c) Persons required to report--(1) In general. The following 
persons must file the information return and transmittal form required 
under paragraph (a) of this section to report minimum essential 
coverage--
    (i) Health insurance issuers, or carriers (as used in 5 U.S.C. 
8901), for all insured coverage, except as provided in paragraph 
(c)(3)(ii) of this section;
    (ii) Plan sponsors of self-insured group health plan coverage;
    (iii) The executive department or agency of a governmental unit 
that provides coverage under a government-sponsored program (within the 
meaning of section 5000A(f)(1)(A)); and
    (iv) Any other person that provides minimum essential coverage to 
an individual.
    (2) Plan sponsors of self-insured group health plan coverage--(i) 
In general. For purposes of this section, a plan sponsor of self-
insured group health plan coverage is--
    (A) The employer for a self-insured group health plan or 
arrangement established or maintained by a single employer (determined 
without application of section 414(b), (c), (m) or (o)), including each 
participating employer with respect to a self-insured group health plan 
or arrangement established or maintained by more than one employer 
(other than a Multiple Employer Welfare Arrangement as defined in 
section 3(40) of ERISA));
    (B) The association, committee, joint board of trustees, or other 
similar group of representatives of the parties who establish or 
maintain the plan for a self-insured group health plan or arrangement 
that is a multiemployer plan (as defined in section 3(37) of ERISA).
    (C) The employee organization for a self-insured group health plan 
or arrangement maintained solely by an employee organization;
    (D) Each participating employer for a self-insured group health 
plan or arrangement maintained by a Multiple Employer Welfare 
Arrangement (as defined in section 3(40) of ERISA) with respect to the 
participating employer's own employees; and
    (E) For a self-insured group health plan or arrangement for which a 
plan sponsor is not otherwise identified in paragraphs (c)(2)(1)(A) 
through (c)(2)(1)(D) of this section, the person designated by plan 
terms as the plan sponsor or plan administrator or, if no person is 
designated as the administrator and a plan sponsor cannot be 
identified, each entity that maintains the plan or arrangement.
    (ii) Government employers. Unless otherwise provided by statute or 
regulation, a government employer that maintains a self-insured group 
health plan or arrangement may enter into a written agreement with 
another governmental unit, or an agency or instrumentality of a 
governmental unit, that designates the other governmental unit, agency, 
or instrumentality as the person required to file the returns and to 
furnish the statements required by this section for some or all of the 
individuals receiving minimum essential coverage under that plan or 
arrangement. The designated governmental unit, agency, or 
instrumentality must be part of or related to the same governmental 
unit as the government employer (for example, a political subdivision 
of a state may designate the state or another political subdivision of 
the state) and agree to the designation. The government employer must 
make or revoke the designation before the earlier of the deadline for 
filing the returns or furnishing the statements required by this 
section. If the requirements of this paragraph (c)(2)(ii) are met, the 
designated governmental unit, agency, or instrumentality is the sponsor 
under paragraph (c)(2)(i) of this section. If no entity is designated, 
the government employer that maintains the self-insured group health 
plan or arrangement is the sponsor under paragraph (c)(2)(i) of this 
section.
    (3) Special rules for government-sponsored programs--(i) Medicaid 
and Children's Health Insurance Program (CHIP) coverage. The State 
agency that administers the Medicaid program under title XIX of the 
Social Security Act (42 U.S.C. 1396 and following sections) or the CHIP 
program under title XXI of the Social Security Act (42 U.S.C. 1396 and 
following sections) must file the returns and furnish the statements 
required by this section for those programs.
    (ii) Government-sponsored coverage provided through health 
insurance issuers. An executive department or agency of a governmental 
unit that provides coverage under a government-sponsored program 
through a health insurance issuer (such as Medicaid, CHIP, or Medicare) 
must file the returns and furnish the statements required by this 
section.
    (iii) Nonappropriated Fund Health Benefits Program. The Secretary 
of Defense may designate the Department of Defense components (as used 
in DoD 7000.14-R, Department of Defense Financial Management 
Regulations) that must file the returns and furnish the statements 
required by this section for the Nonappropriated Fund Health Benefits 
Program.
    (4) Other arrangements recognized as minimum essential coverage. 
The Commissioner may designate in published guidance, see Sec.  
601.601(d) of this chapter, the reporting entity for arrangements the 
Secretary of Health and Human Services, in coordination with the 
Secretary of the Treasury, recognizes under section 5000A(f)(1)(E) as 
minimum essential coverage.
    (d) Information required to be reported to the Internal Revenue 
Service--(1) In general. All information returns required by this 
section must report the following information for the calendar year of 
coverage--
    (i) Name, address, and employer identification number (EIN) for the 
person required to file the return;
    (ii) Name, address, and TIN, or date of birth if a TIN is not 
available, of the responsible individual;
    (iii) Name and TIN, or date of birth if a TIN is not available, of 
each individual covered under the policy or program;
    (iv) For each covered individual, the months for which, for at 
least one day, the individual was enrolled in coverage and entitled to 
receive benefits; and
    (v) Any other information specified in forms, instructions, or 
published guidance, see Sec. Sec.  601.601(d) and 601.602 of this 
chapter.
    (2) Information relating to employer-provided coverage. In addition 
to the information described in paragraph (d)(1) of this section, 
information returns reporting minimum essential coverage provided to an 
individual that is coverage provided by a health insurance issuer 
through a group health plan must report--
    (i) Name, address, and EIN of the employer sponsoring the plan;
    (ii) Whether the coverage is a qualified health plan enrolled in 
through the Small Business Health Options Program (SHOP) and the SHOP's 
unique identifier; and
    (iii) Other information specified in forms, instructions, or 
published guidance, see Sec. Sec.  601.601(d) and 601.602 of this 
chapter.
    (e) Reporting not required--(1) Qualified health plans. A health 
insurance issuer is not required to file a return or furnish a report 
under this section for coverage in a qualified health plan in the 
individual market enrolled in through an Exchange.
    (2) Additional health benefits. No information return is required 
to report arrangements that provide benefits in addition or as a 
supplement to a health plan or arrangement that constitutes minimum 
essential coverage.

[[Page 54994]]

    (3) Individuals not enrolled in coverage. No reporting is required 
under this section for coverage offered to individuals who do not 
enroll.
    (f) Time and place for filing return--(1) In general. A reporting 
entity must file the return and transmittal form required under 
paragraph (a) of this section 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. A reporting 
entity must file the return and transmittal form at the address 
specified on the return form or in its instructions.
    (2) Extensions of time. See Sec.  1.6081-8 for rules relating to 
extensions of time to file.
    (3) Electronic filing. See Sec.  301.6011-8 of this chapter for 
rules relating to electronic filing.
    (4) Form of return. A return required under this paragraph (f) may 
be made on Form 1095-B or other form designated by the Internal Revenue 
Service or on a substitute form. A substitute form must comply with 
revenue procedures or other published guidance (see Sec.  601.601(d)(2) 
of this chapter) that apply to substitute forms.
    (g) Statements to be furnished to individuals--(1) In general. 
Every person required to file a return under this section must furnish 
to the responsible individual identified on the return a written 
statement showing--
    (i) Contact phone number for the person required to file the return 
and policy number, if applicable; and
    (ii) Information described in paragraph (d) of this section for the 
reporting entity and each individual listed on the return.
    (2) Statements for individuals other than the responsible 
individual. A reporting entity is not required to provide a statement 
described in paragraph (g)(1) of this section to an individual who is 
not the responsible individual.
    (3) Form of the statement. A statement required under this 
paragraph (g) may be made either by furnishing to the responsible 
individual identified in the return a copy of the return filed with the 
IRS or on a substitute statement. A substitute statement must include 
the information required to be shown on the return filed with the IRS, 
and must comply with requirements in published guidance (see Sec.  
601.601(d)(2) of this chapter) relating to substitute statements. An 
IRS truncated taxpayer identifying number may be used as the 
identifying number for an individual in lieu of the identifying number 
appearing on the corresponding information return filed with the IRS.
    (4) Time and manner for furnishing statements. A reporting entity 
must furnish the statements required under this paragraph (g) on or 
before January 31 of the year following the calendar year in which 
minimum essential coverage is provided. If mailed, the statement must 
be sent to the individual's last known permanent address or, if no 
permanent address is known, to the individual's temporary address. A 
reporting entity may furnish the statement electronically in accordance 
with Sec.  1.6055-2.
    (h) Penalties--(1) Failure to file correct returns. The section 
6721 penalty may apply to a person that fails to file information 
returns required by this section on or before the required filing date, 
fails to include all of the required information on the return, or 
includes incorrect information on the return. See section 6724 and the 
regulations under that section for rules relating to waivers of 
penalties for certain failures due to reasonable cause.
    (2) Failure to furnish correct information statements. The section 
6722 penalty may apply to a reporting entity that fails to furnish 
statements required by this section on or before the prescribed date, 
fails to include all the required information on the statement, or 
includes incorrect information on the statement. See section 6724 and 
the regulations under that section for rules relating to waivers of 
penalties for certain failures due to reasonable cause.
    (i) Effective/applicability date. This section applies for calendar 
years beginning after December 31, 2014. Reporting entities will not be 
subject to penalties under section 6721 or 6722 with respect to the 
reporting requirements for 2014 (for information returns that would 
have been required to be filed and statements that would have been 
required to be furnished to covered individuals in 2015 with respect to 
2014).


Sec.  1.6055-2  Electronic furnishing of statements reporting minimum 
essential coverage.

    (a) Electronic furnishing of statements--(1) In general. A person 
required by section 6055 to furnish a statement (furnisher) to a 
responsible individual (a recipient) may furnish the statement in an 
electronic format in lieu of a paper format. A furnisher who meets the 
requirements of paragraphs (a)(2) through (a)(6) of this section is 
treated as furnishing the statement in a timely manner.
    (2) Consent--(i) In general. The recipient must have affirmatively 
consented to receive the statement in an electronic format. The consent 
may be made electronically in any manner that reasonably demonstrates 
that the recipient can access the statement in the electronic format in 
which it will be furnished. Alternatively, the consent may be made in a 
paper document that is confirmed electronically.
    (ii) Withdrawal of consent. The furnisher may provide in the 
disclosure furnished pursuant to paragraph (a)(3)(v) of this section 
that a withdrawal of consent takes effect either on the date the 
furnisher receives it or on another date no more than 60 days later. A 
furnisher may treat a request for a paper statement as a withdrawal of 
consent. If the furnisher provides a statement after the withdrawal of 
consent takes effect, the recipient has not consented to receive the 
statement in electronic format.
    (iii) Change in hardware or software requirements. If a change in 
the hardware or software required to access the statement creates a 
material risk that the recipient will not be able to access a 
statement, a furnisher must, prior to changing the hardware or 
software, notify the recipient. The notice must describe the revised 
hardware and software required to access the statement and inform the 
recipient that a new consent to receive the statement in the revised 
electronic format must be provided to the furnisher. After implementing 
the revised hardware or software, the furnisher must obtain a new 
consent or confirmation of consent to receive the statement 
electronically from the recipient.
    (iv) Examples. The following examples illustrate the rules of this 
paragraph (a)(2):

    Example 1.  Furnisher F sends Recipient R a letter stating that 
R may consent to receive the statement required under section 6055 
electronically on a Web site instead of in a paper format. The 
letter contains instructions explaining how to consent to receive 
the statement electronically by accessing the Web site, downloading 
and completing the consent document, and emailing the completed 
consent back to F. The consent document posted on the Web site uses 
the same electronic format that F will use for the electronically 
furnished statement. R reads the instructions and submits the 
consent in the manner provided in the instructions. R has consented 
to receive the statement required under section 6055 electronically 
in the manner described in paragraph (a)(2)(i) of this section.
    Example 2. Furnisher F sends Recipient R an email stating that R 
may consent to receive the statement required under section 6055 
electronically instead of in a paper format. The email contains an 
attachment instructing R how to consent to receive the statement 
required under section 6055 electronically. The email attachment 
uses the same electronic format that F will use for the

[[Page 54995]]

electronically furnished statement. R opens the attachment, reads 
the instructions, and submits the consent in the manner provided in 
the instructions. R has consented to receive the statement required 
under section 6055 electronically in the manner described in 
paragraph (a)(2)(i) of this section.
    Example 3. Furnisher F posts a notice on its Web site stating 
that Recipient R may receive the statement required under section 
6055 electronically instead of in a paper format. The Web site 
contains instructions on how R may access a secure Web page and 
consent to receive the statements electronically. R accesses the 
secure Web page and follows the instructions for giving consent. R 
has consented to receive the statement required under section 6055 
electronically in the manner described in paragraph (a)(2)(i) of 
this section.

    (3) Required disclosures--(i) In general. Prior to, or at the time 
of, a recipient's consent, a furnisher must provide to the recipient a 
clear and conspicuous disclosure statement containing each of the 
disclosures described in this paragraph (a)(3).
    (ii) Paper statement. The furnisher must inform the recipient that 
the statement will be furnished on paper if the recipient does not 
consent to receive it electronically.
    (iii) Scope and duration of consent. The furnisher must inform the 
recipient of the scope and duration of the consent. For example, the 
recipient must be informed whether the consent applies to each 
statement required to be furnished after the consent is given until it 
is withdrawn or only to the first statement required to be furnished 
following the consent.
    (iv) Post-consent request for a paper statement. The furnisher must 
inform the recipient of any procedure for obtaining a paper copy of the 
recipient's statement after giving the consent described in paragraph 
(a)(2)(i) of this section and whether a request for a paper statement 
will be treated as a withdrawal of consent.
    (v) Withdrawal of consent. The furnisher must inform the recipient 
that--
    (A) The recipient may withdraw a consent by writing (electronically 
or on paper) to the person or department whose name, mailing address, 
telephone number, and email address is provided in the disclosure 
statement;
    (B) The furnisher will confirm the withdrawal and the date on which 
it takes effect in writing (either electronically or on paper); and
    (C) A withdrawal of consent does not apply to a statement that was 
furnished electronically in the manner described in this paragraph (a) 
before the date on which the withdrawal of consent takes effect.
    (vi) Notice of termination. The furnisher must inform the recipient 
of the conditions under which the furnisher will cease furnishing 
statements electronically to the recipient (for example, termination of 
the recipient's employment with a furnisher who is the recipient's 
employer).
    (vii) Updating information. The furnisher must inform the recipient 
of the procedures for updating the information needed to contact the 
recipient. The furnisher must inform the recipient of any change in the 
furnisher's contact information.
    (viii) Hardware and software requirements. The furnisher must 
provide the recipient with a description of the hardware and software 
required to access, print, and retain the statement, and the date when 
the statement will no longer be available on the Web site. The 
furnisher must advise the recipient that the statement may be required 
to be printed and attached to a Federal, State, or local income tax 
return.
    (4) Format. The electronic version of the statement must contain 
all required information and comply with applicable published guidance 
(see Sec.  601.601(d) of this chapter) relating to substitute 
statements to recipients.
    (5) Notice--(i) In general. If a statement is furnished on a Web 
site, the furnisher must notify the recipient. The notice may be 
delivered by mail, electronic mail, or in person. The notice must 
provide instructions on how to access and print the statement and 
include the following statement in capital letters, ``IMPORTANT TAX 
RETURN DOCUMENT AVAILABLE.'' If the notice is provided by electronic 
mail, this statement must be on the subject line of the electronic 
mail.
    (ii) Undeliverable electronic address. If an electronic notice 
described in paragraph (a)(5)(i) of this section is returned as 
undeliverable, and the furnisher cannot obtain the correct electronic 
address from the furnisher's records or from the recipient, the 
furnisher must furnish the notice by mail or in person within 30 days 
after the electronic notice is returned.
    (iii) Corrected statement. The furnisher must furnish a corrected 
statement to the recipient electronically if the original statement was 
furnished electronically. If the original statement was furnished 
through a Web site posting, the furnisher must notify the recipient 
that it has posted the corrected statement on the Web site in the 
manner described in paragraph (a)(5)(i) of this section within 30 days 
of the posting. The corrected statement or the notice must be furnished 
by mail or in person if--
    (A) An electronic notice of the Web site posting of an original 
statement or the corrected statement was returned as undeliverable; and
    (B) The recipient has not provided a new email address.
    (6) Access period. Statements furnished on a Web site must be 
retained on the Web site through October 15 of the year following the 
calendar year to which the statements relate (or the first business day 
after October 15, if October 15 falls on a Saturday, Sunday, or legal 
holiday). The furnisher must maintain access to corrected statements 
that are posted on the Web site through October 15 of the year 
following the calendar year to which the statements relate (or the 
first business day after such October 15, if October 15 falls on a 
Saturday, Sunday, or legal holiday) or the date 90 days after the 
corrected forms are posted, whichever is later.
    (7) Paper statements after withdrawal of consent. A furnisher must 
furnish a paper statement if a recipient withdraws consent to receive a 
statement electronically and the withdrawal takes effect before the 
statement is furnished. A paper statement furnished after the statement 
due date under this paragraph (a)(7) is timely if furnished within 30 
days after the date the furnisher receives the withdrawal of consent.
    (b) Effective/applicability date. This section applies for calendar 
years beginning after December 31, 2014. Reporting entities will not be 
subject to penalties under section 6722 with respect to the reporting 
requirements for 2014 (for statements that would have been required to 
be furnished to covered individuals in 2015 with respect to 2014).
0
Par. 3. Section 1.6081-8 is amended by adding the language ``1095 
series'' between the words ``1042-S,'' and ``1098'' in paragraph (a).

PART 301--PROCEDURE AND ADMINISTRATION

0
Par. 4. The authority citation for part 301 continues to read in part 
as follows:

    Authority: 26 U.S.C. 7805 * * *

0
Par. 5. Section 301.6011-8 is added to read as follows:


Sec.  301.6011-8  Required use of magnetic media to report minimum 
essential coverage.

    (a) Returns reporting minimum essential coverage must be filed on 
magnetic media. A person required to file an information return 
reporting minimum essential coverage under

[[Page 54996]]

Sec.  1.6055-1 of this chapter must file the return on magnetic media 
if the person is required to file to least 250 returns during the 
calendar year. Returns filed on magnetic media must be made in 
accordance with applicable publications, forms, instructions, or 
published guidance, see Sec. Sec.  601.601(d) and 601.602 of this 
chapter.
    (b) Magnetic media. For purposes of this section, the term magnetic 
media has the same meaning as in Sec.  301.6011-2(a)(1).
    (c) Determination of 250 returns. For purposes of this section, a 
person is required to file at least 250 returns if, during the calendar 
year, the person is required to file at least 250 returns of any type, 
including information returns (for example, Forms W-2, Forms 1099), 
income tax returns, employment tax returns, and excise tax returns.
    (d) Waiver. The Commissioner may waive the requirements of this 
section in cases of hardship in accordance with Sec.  301.6011-
2(c)(2)(i).
    (e) Failure to file. If a person fails to file an information 
return on magnetic media when required by this section, the person is 
deemed to have failed to file the return. See section 6721 for 
penalties for failure to file returns and see section 6724 and the 
regulations under section 6721 for failure to file on magnetic media.
    (f) Effective/applicability date. This section applies to returns 
on Form 1095-B or another form the IRS designates required to be filed 
after December 31, 2015. Reporting entities will not be subject to 
penalties under section 6721 with respect to the reporting requirements 
for 2014 (for information returns that would have been required to be 
filed in 2015 with respect to 2014).
0
Par 6. Section 301.6721-1 is amended by removing the word ``or'' after 
paragraph (g)(3)(xxii), removing the period and adding a semi-colon in 
its place after paragraph (g)(3)(xxiii), and adding paragraphs 
(g)(3)(xxiv) and (g)(3)(xxv) to read as follows:


Sec.  301.6721-1  Failure to file correct information returns.

* * * * *
    (g) * * *
    (3) * * *
    (xxiv) Section 6055 (relating to information returns reporting 
minimum essential coverage); or
    (xxv) Section 6056 (relating to information returns reporting on 
offers of health insurance coverage by applicable large employer 
members).
* * * * *
0
Par 7. Section 301.6722-1 is amended by removing the word ``or'' after 
paragraph (d)(2)(xxxi), removing the period and adding a semi-colon in 
its place after paragraph (d)(2)(xxxii), and adding paragraphs 
(d)(2)(xxxiii) and (d)(2)(xxxiv) to read as follows:


Sec.  301.6722-1  Failure to furnish correct payee statements.

* * * * *
    (d) * * *
    (2) * * *
    (xxxiii) Section 6055 (relating to information returns reporting 
minimum essential coverage); or
    (xxxiv) Section 6056 (relating to information returns reporting on 
offers of health insurance coverage by applicable large employer 
members).
* * * * *

Heather C. Maloy,
Acting Deputy Commissioner for Services and Enforcement.
[FR Doc. 2013-21783 Filed 9-5-13; 4:15 pm]
BILLING CODE 4830-01-P