[Federal Register Volume 79, Number 46 (Monday, March 10, 2014)]
[Rules and Regulations]
[Pages 13220-13231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05051]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 301, and 602
[TD 9660]
RIN 1545-BL31
Information Reporting of Minimum Essential Coverage
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
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SUMMARY: This document contains final 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 Patient Protection and 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 the
information in statements to covered individuals. These final
regulations affect health insurance issuers and carriers, employers,
governments, and other persons that provide minimum essential coverage
to individuals.
DATES: Effective Date: These regulations are effective on March 10,
2014.
Applicability Dates: For dates of applicability, see Sec. Sec.
1.6055-1(j) and 1.6055-2(b).
FOR FURTHER INFORMATION CONTACT: Andrew Braden, (202) 317-4718 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in these regulations has
been reviewed and approved by the Office of Management and Budget in
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d))
under control number 1545-2252.
The collection of information in these final 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 sections 5000A and 6055 of the Code. The
likely respondents are health insurance issuers and carriers, self-
insured employers or other sponsors of self-insured group health plans,
and governments that provide minimum essential coverage.
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.
The burden for the collection of information contained in these
final 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 final regulations.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
return information are confidential, as required by section 6103.
Background
This document contains final regulations that amend the Income Tax
Regulations (26 CFR part 1) under sections 6055 and 6081 and the
Procedure and Administration Regulations (26 CFR part 301) under
sections 6011, 6721, and 6722, relating to the requirement for
providers of minimum essential coverage (as defined in section
5000A(f)) to report to the IRS certain information about individuals
covered by minimum essential coverage and to provide a statement to the
individuals. Section 6055 was enacted by section 1502 of the Patient
Protection and Affordable Care Act, Public Law 111-148 (124 Stat. 119
(2010)), which together with the Health Care and Education
Reconciliation Act of 2010, Public Law 111-152 (124 Stat. 1029 (2010)),
is referred to as the Affordable Care Act.
On September 9, 2013, a notice of proposed rulemaking (REG-132455-
11) was published in the Federal Register (78 FR 54986). Written
comments responding to the proposed regulations were received. A public
hearing was held on November 19, 2013. The comments are available for
public inspection at www.regulations.gov or on request. After
consideration of all the comments, the proposed regulations are adopted
as amended by this Treasury decision. These final regulations also
include certain nonsubstantive revisions to increase consistency with
final regulations issued under section 6056 (TD 9661) contemporaneously
with these regulations
Explanation of Provisions and Summary of Comments
1. Coverage Subject To Reporting
a. Minimum Essential Coverage
The proposed regulations provided that 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
IRS. Minimum essential coverage is defined in section 5000A(f) and
regulations issued under that section.
Commenters suggested that section 6055 reporting should not be
required for an individual who may be exempt from the individual shared
responsibility payment under section 5000A.
Providers of minimum essential coverage, including employers
providing coverage under a self-insured group health plan, may not have
the information necessary to determine an individual's exempt status
under
[[Page 13221]]
section 5000A. To ensure complete and accurate reporting, the final
regulations provide for section 6055 reporting for all covered
individuals.
b. Supplemental Coverage Arrangements
The proposed regulations provided that reporting is not required
for arrangements that provide benefits in addition or as a supplement
to a health plan or arrangement that constitutes minimum essential
coverage. The preamble to the proposed regulations identified health
reimbursement arrangements as supplemental coverage to which this rule
may apply. In addition, reporting is not required for coverage that is
not minimum essential coverage. The preamble to the proposed
regulations noted that no reporting is required for health savings
accounts, which are not minimum essential coverage.
A commenter asked whether on-site medical clinics are supplemental
benefits for which no reporting is required under this rule. Another
commenter asked whether reporting is required for an individual who is
covered by Medicare Part B but not Medicare Part A.
Under section 9832(c)(1)(G), coverage at on-site medical clinics
are excepted benefits. Section 5000A(f)(3) provides that excepted
benefits are not minimum essential coverage. Under section
5000A(f)(1)(A)(i), Medicare Part A but not Medicare Part B is minimum
essential coverage. Accordingly, section 6055 reporting is not required
for coverage at on-site medical clinics or for Medicare Part B.
Commenters asked whether the supplemental coverage rule applies to
wellness programs or to self-insured employer-provided retiree coverage
that supplements Medicare benefits. Wellness programs that are an
element of other minimum essential coverage (such as wellness programs
offering reduced premiums or cost-sharing under a group health plan) do
not require separate section 6055 reporting. The final regulations
clarify that minimum essential coverage that supplements a primary plan
of the same plan sponsor or that supplements government-sponsored
coverage (such as Medicare) are supplemental coverage not subject to
reporting.
2. Persons Required To Report
a. Self-Insured Group Health Plans
i. Controlled Groups
The proposed regulations provided that the plan sponsor is
responsible for reporting under section 6055 for a self-insured group
health plan and identified the sponsor and reporting entity for various
types of self-insured arrangements. In general, the plan sponsor is the
entity that establishes or maintains the plan. The proposed regulations
provided that the employer is the plan sponsor for self-insured group
health plans established or maintained by a single employer and that
each participating employer is the plan sponsor for a plan established
or maintained by more than one employer other than a multiple employer
welfare arrangement. The proposed regulations also provided that, for
purposes of identifying the employer, the section 414 employer
aggregation rules do not apply. Thus, under the proposed regulations, a
self-insured group health plan or arrangement covering employees of
employers in a controlled group was treated as sponsored by more than
one employer and each employer was required to report for its
employees.
Commenters requested that the final regulations allow, but not
require, one entity in a controlled group to report under section 6055
for all members of the group. A commenter noted that only one entity
within the group may maintain the plan. Other commenters noted that in
some controlled groups each entity may keep its own records but other
groups may not track the entity to which an employee belongs.
Most employers that sponsor self-insured group health plans are
applicable large employer members required to report under both section
6056 and section 6055. As discussed later in this preamble, the final
regulations provide that applicable large employer members that are
plan sponsors of self-insured group health plans will file a single
information return that combines reporting under sections 6055 and
6056. These entities apply the rules under section 6056 for identifying
the reporting entities in a controlled group. As stated in the preamble
to the proposed regulations, one member of a controlled group may
assist the other members by filing returns and furnishing statements on
behalf of all members, thus providing administrative flexibility.
However, each employer is treated as a plan sponsor separately liable
for timely and correct reporting. Employers in controlled groups that
are not applicable large employer members (determined after applying
the aggregation rules under Sec. 54.4980H-1(a)(16)), and reporting
entities (such as issuers) that are not reporting as employers, may
report under section 6055 as separate entities, or one entity may
report for the group.
ii. Statutory Employees
A commenter asked that the final regulations clarify that a company
may report self-insured group health plan coverage provided to
statutory employees, that is, individuals who are not common law
employees but are treated as employees under the Code for some
purposes. The commenter noted that the employer shared responsibility
payment under section 4980H and related information reporting under
section 6056 apply to common law and not statutory employees.
Under section 6055, the provider of minimum essential coverage must
report for covered individuals. In many cases, the provider is not the
employer of the covered individuals. The proposed and final regulations
provide that that the plan sponsor of a self-insured group health plan
reports under section 6055. Accordingly, the plan sponsor reports under
section 6055 for individuals covered by the plan, whether or not the
individuals are employees.
b. Small Business Health Options Program (SHOP)
In order to reduce the compliance burden on health insurance
issuers, the proposed regulations provided that issuers are not
required to report under section 6055 on qualified health plans
enrolled in through Affordable Insurance Exchanges (Exchanges), also
called Marketplaces. Commenters requested that Exchanges also be
responsible for section 6055 reporting for coverage obtained through
the SHOP.
The final regulations do not require health insurance issuers to
report under section 6055 for coverage under individual market
qualified health plans purchased through an Exchange because Exchanges
must report on this coverage under section 36B(f)(3). Exchanges are not
required, however, to report on coverage obtained through the SHOP,
therefore issuer reporting of SHOP coverage under section 6055 is
necessary.
c. Government Employers
Pursuant to section 6055(d), the proposed regulations provided
that, in general, 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, designating the other governmental unit, agency, or
instrumentality as the person responsible for section 6055 reporting.
The proposed regulations reserved the definition of agency or
instrumentality.
[[Page 13222]]
Under the proposed regulations, a government employer included an
Indian tribal government (as defined in section 7701(a)(40)) or
subdivision of an Indian tribal government (as defined in section
7871(d)). A commenter asked whether a wholly-owned tribal entity formed
under tribal and federal law is an agency or instrumentality of a
governmental unit. The commenter suggested that it is administratively
burdensome for an Indian tribal government (ITG) to determine whether a
particular entity qualifies as an agency or instrumentality of an ITG
under existing authorities, such as Revenue Ruling 57-128 (1957-1 CB
311), see Sec. 601.601(d), relating to employment taxes.
The final regulations continue to reserve on the definition of
agency or instrumentality for purposes of section 6055. Until future
guidance is issued that defines that term for purposes of section 6055,
in determining whether an entity is an agency or instrumentality of a
governmental unit, the entity may make that determination based on a
reasonable and good faith interpretation of existing rules relating to
agency or instrumentality determinations for other federal tax
purposes.
d. Government-Sponsored Programs
The proposed regulations provided that, in general, a health
insurance issuer must report under section 6055 for all insured
coverage. However, under the proposed regulations the responsible
government department or agency and not the issuer was the reporting
entity for coverage under a government-sponsored program provided
through a health insurance issuer (such as some Medicaid, Children's
Health Insurance Program (CHIP), and Medicare programs). A commenter
requested that the final regulations specify that this rule applies to
the Medicare Advantage program. The final regulations clarify that
issuers do not report coverage under the Medicare Advantage program.
3. Information Required To Be Reported
a. Information Not Required To Be Reported
Section 6055 calls for the reporting of several data elements that
are not required by taxpayers for preparing their tax returns or by the
IRS for tax administration. As part of the effort to minimize the cost
and simplify the administrative implementation of reporting under
section 6055, the proposed regulations did not require reporting these
unnecessary items. For example, the proposed regulations did not
require reporting the amount of advance payments of the premium tax
credit and cost-sharing reductions or the amount of the premium for
employer coverage paid by an employer. Several commenters expressed
support for these simplifications, and the final regulations retain
them.
b. Taxpayer Identification Numbers (TINs)
i. Requirement To Request TINs
The proposed regulations implemented the statutory requirement that
the section 6055 information return include the name and TIN for the
primary insured or other related person (such as a parent or spouse)
who submits the application for coverage, which the proposed
regulations called the responsible individual, and for each covered
individual. However, the proposed regulations permitted reporting
entities to report a date of birth if a TIN is not available for an
individual.
Some commenters advised that they do not currently obtain TINs for
individuals enrolled in coverage, particularly for dependents, and
asserted that the requirement to obtain TINs is burdensome and
unnecessary. Commenters suggested that individuals will be reluctant to
provide TINs and that no enforcement mechanism such as backup
withholding is available. Some commenters expressed concerns about the
risk of misuse of TINs and violations of privacy. Commenters requested,
in general, that the final regulations allow reporting entities to
report only a date of birth in lieu of a TIN for all individuals, or
alternatively to provide a TIN only for an employee or other
responsible individual and dates of birth for other covered
individuals. Other commenters suggested that TIN reporting should be
limited to the reporting under section 111 of the Medicaid, Medicare,
and SCHIP Extension Act of 2007 (PL 110-173, 121 Stat. 2492), which
requires TIN reporting only for individuals age 45 to 64 with coverage
based on employment status.
After consideration of the comments, the final regulations retain
the rule in the proposed regulations directing reporting entities to
provide TINs for all covered individuals and to provide a date of birth
only if a TIN is not available after the reporting entity makes
reasonable efforts to obtain it. The purpose of information reporting
under section 6055 is for individuals to establish, and the IRS to
confirm, that the individuals have minimum essential coverage and are
not subject to the section 5000A individual responsibility payment. The
information on Form 1040 identifying dependents that can be matched
with section 6055 reporting is name and TIN. Because many individuals
have the same name, the name and TIN combination enable the IRS to
identify that a particular individual has minimum essential coverage.
Individuals have a strong incentive to provide a TIN to the
reporting entity if one is available to establish that they have
coverage qualifying under section 5000A. Without a TIN to enable the
IRS to match coverage reported on the Form 1040 with coverage reported
on a section 6055 return, individuals will receive correspondence from
the IRS asking them to verify coverage. Accordingly, the final
regulations allow section 6055 reporting of dates of birth in lieu of
TINs only if the reporting entity is informed that an individual has no
TIN or the reporting entity is unable to obtain a TIN after making
reasonable efforts, as discussed in more detail later in this preamble.
Nothing in these final regulations authorizes a reporting entity to
terminate coverage if a TIN is not provided. Reporting a date of birth
in one year does not eliminate the need to make reasonable efforts to
obtain a TIN.
A commenter suggested that requiring TIN reporting for responsible
individuals not enrolled in the coverage reported is unnecessary and
inconsistent with the statute, which requires reporting a TIN for the
``primary insured'' and each other covered individual. Under section
6055(b)(1)(B)(iv), the Secretary may direct the reporting of other
information. Reporting of TINs for responsible individuals not enrolled
in the coverage is helpful for tax administration because it
facilitates matching the coverage of individuals reported under section
6055 with individuals for whom the responsible individual claims a
personal exemption deduction. However, in response to the comment, the
final regulations provide that reporting TINs for responsible
individuals not enrolled in the coverage is optional.
Commenters requested that the final regulations include rules on
confidentiality and restricting the use of private information by
issuers and employers. A commenter suggested that the final regulations
include rules similar to 45 CFR 155.260 and 45 CFR 155.715, which
restrict the use of confidential information by Exchanges. The cited
regulations under 45 CFR are issued under the authority of the
Department of Health and Human Services (HHS) to oversee and regulate
[[Page 13223]]
the operation of Exchanges. Because the IRS and Treasury Department
lack similar regulatory authority over section 6055 reporting entities,
the final regulations do not include rules on confidentiality. However,
existing privacy rules, such as those issued by HHS, apply and protect
consumers' information.
To help protect against theft of social security numbers and other
TINs, IRS rules permit reporting entities required to furnish certain
statements to partially mask the TIN of statement recipients and others
reported on an information statement by using a truncated TIN. It is
expected that section 6055 reporting entities will be able to truncate
the TINs of the responsible individual and covered individuals under
these rules. The final regulations clarify that reporting entities are
permitted to use truncated TINs on section 6055 statements.
ii. Reasonable Efforts To Obtain TINs
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) or failure
to furnish a correct payee statement (section 6722). These penalties
may be waived if the failure was due to reasonable cause and not
willful neglect (section 6724(a)). The preamble to the proposed
regulations noted that the section 6721 and 6722 penalties may apply to
a section 6055 reporting entity but the penalties may be waived under
section 6724 and the related regulations for certain failures due to
reasonable cause. The preamble explained that penalties are waived if a
reporting entity demonstrates that it acted in a responsible manner and
that the failure is due to significant mitigating factors or events
beyond the reporting entity's control. See Sec. 301.6724-1(a)(1).
Some commenters were uncertain about what solicitations are
required to satisfy the requirement to act in a responsible manner. In
general, under Sec. 301.6724(e) (regarding missing TINs), a person
will be treated as acting in a responsible manner if the person
properly solicits the TIN but does not receive it. Under these rules,
the reporting entity makes an initial solicitation at the time the
relationship with the payee is established. However, the reporting
entity is not required to make this initial solicitation if it already
has the payee's TIN and uses that TIN for all relationships with the
payee. If the reporting entity does not receive the TIN, the first
annual solicitation is generally required by December 31 of the year in
which the relationship with the payee begins (January 31 of the
following year if the relationship begins in December). Generally, if
the TIN is still not provided, a second solicitation is required by
December 31 of the following year. If a TIN is still not provided, the
reporting entity has acted in a responsible manner and need not
continue to solicit a TIN.
For example, a reporting entity that makes an unsuccessful initial
solicitation for a TIN in December 2014 must make a second solicitation
by December 31, 2015. Assuming that request is also unsuccessful, the
reporting entity would not be penalized if its section 6055 reporting
submitted in early 2016 reported a date of birth in place of TIN for
the individual in question. One additional solicitation must be made by
December 31, 2016, to have acted in a responsible manner.
Commenters pointed out that the rules for solicitation in the
existing regulations may not adequately address the circumstances
surrounding the relationship between a reporting entity and a
responsible individual and the covered individuals. Commenters
requested that the final regulations provide rules on soliciting TINs
specific to section 6055 reporting. For instance, a commenter suggested
that a reporting entity should be allowed to certify that it has made
reasonable efforts to obtain TINs and that the certification should be
reviewed only upon examination, so that reporting entities do not have
to respond to IRS notices requesting missing TINs. Commenters also
suggested that the final regulations require reporting entities to
request information only once or at most twice. Other commenters asked
whether certain procedures that are not addressed in the current
section 6724 regulations would satisfy the solicitation requirement,
including: (1) Is a reporting entity required to restart the
solicitation process if a new individual is added to a policy; (2) does
soliciting information from the responsible individual serve as
soliciting information from each covered individual on the section 6055
statement; (3) must reporting entities solicit information on a Form W-
9, Request for Taxpayer Identification Number and Certification, or may
a request for information on, for example, an application for insurance
coverage serve as the first solicitation; (4) may a reporting entity
obtain information from other documents in its possession; and (5) may
reporting entities solicit information by email or phone call.
In enacting the Affordable Care Act, Congress added section 6055
reporting to the list of reporting provisions to which the section
6721, 6722, and 6724 penalty provisions apply, indicating that Congress
intended that section 6055 reporting should be subject to the same
rules in this regard as other information reporting. Regulations and
other authorities under those sections already provide detailed rules
for compliance, including the rules described above for waiving any
penalties for reasonable cause that address some of the commenters
questions. For instance, consistent with the rules in Sec. 301.6724-
1(e)(1)(i), the reporting entity may make an initial solicitation
orally (by phone or in person), in writing (including using an
application), or by electronic means such as email. The rules for the
manner of making an annual solicitation should apply in the case of
section 6055 as well. See, for example, Sec. 301.6724-1(e)(2).
Under Sec. 301.6724-1(e)(1)(i), an initial solicitation is not
required if the reporting entity already has the payee's TIN and uses
that TIN for all relationships of the payee with the reporting entity.
In the case of section 6055 reporting, a reporting entity would
likewise not be required to make an initial solicitation if the
reporting entity has the TIN or other documents in its possession that
it uses for other aspects of its relationship with the covered
individual and/or responsible individual. For example, if the reporting
entity is also the responsible individual's employer, the reporting
entity does not have to make an initial solicitation for the employee's
TIN for purposes of section 6055 reporting and may use the TIN that is
used for employment purposes.
The solicitation rules under section 6724 also address situations
in which the reporting entity does not have TIN information for account
holders. Accounts commonly are maintained jointly. In these situations,
the solicitation rules do not require solicitation of the accountholder
merely because another person is added to the account. Similarly,
although the addition of a new individual to a policy would trigger an
obligation to obtain a TIN for the newly added individual, it would not
trigger an obligation to solicit a TIN from existing covered
individuals (or the responsible person).
Treasury and the IRS recognize that the existing solicitation rules
under section 6724 may not address certain circumstances that may arise
with respect to reporting under section 6055. Although the final
regulations do not revise the regulations under section
[[Page 13224]]
6724 to specifically address these circumstances, Treasury and the IRS
will continue to study the issue and may provide additional
clarification if appropriate through guidance or forms and
instructions.
c. Employer Identification Numbers (EINs)
The proposed regulations required reporting entities to report the
name, address, and EIN of the plan sponsor. A health insurance issuer
also must report the EIN of an employer maintaining a plan and whether
coverage was enrolled in through the SHOP.
The proposed regulations provided that, for a multiemployer group
health plan, the plan sponsor is the association, committee, joint
board of trustees, or other similar group of representatives of the
parties who establish or maintain the plan. A commenter asked that the
final regulations clarify that the plan sponsor of a multiemployer plan
is not required to report the EIN of the participating employers. The
proposed and final regulations do not require sponsors of multiemployer
plans to report the EINs of the participating employers. The
regulations require only health insurance issuers to report the EIN of
the employer sponsoring an insured group health plan.
d. Coverage Dates
The proposed regulations provided that section 6055 information
returns must provide the months for which an individual is enrolled in
and entitled for at least one day to receive benefits under the
coverage. Several commenters supported the requirement to report only
the months of coverage, while others requested that reporting entities
be allowed to report coverage dates instead of months. Section 6055
reporting of coverage on a monthly basis simplifies compliance for
individual taxpayers because section 5000A requires that they
demonstrate coverage under minimum essential coverage for each month of
a taxable year. Accordingly, the final regulations retain the rule in
the proposed regulations.
4. Time and Manner of Filing
a. Electronic Filing
The proposed regulations provided that any person who is required
to file under section 6055 must file electronically if the person is
required to file at least 250 returns of any type. The proposed
regulations aggregated all returns, including information returns (for
example, Forms W-2 and 1099), income tax returns, employment tax
returns, and excise tax returns, filed for the calendar year to
determine if the 250-return threshold is met. A commenter requested
that the final regulations require electronic reporting only if a
reporting entity files at least 250 Forms W-2.
A ``no aggregation'' method of determining whether the 250 return
threshold is met is consistent with the application of the rule to
other information returns, such as Forms 1099 and W-2, that apply the
250 return threshold separately to each type of return required to be
filed. See Sec. 301.6011-2(c)(1). The final regulations adopt this
rule. 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. Like transmittals of other
information returns, the transmittal (Form 1094-B or 1094-C) is not
treated as a separate return but must be electronically filed in the
form and manner required by the IRS when the Form 1095 is
electronically filed. The final regulations amend Sec. 301.6011-2 to
add Forms in the 1094 and 1095 series. Proposed Sec. 301.6011-8 will
be removed in a separate document.
b. Corrected Returns
The proposed regulations provided that the section 6721 and section
6722 penalties for failing to timely report correct information apply
to reporting entities under section 6055. Penalties under section 6721
and section 6722 are reduced if a reporting entity files a corrected
return within 30 days after the required filing date. Penalties also
are reduced, but by a lesser amount, if a reporting entity makes a
correction by August 1 following the reporting date. Penalties may be
waived under section 6724 if the failure to timely and accurately
report is due to reasonable cause and not willful neglect.
A commenter stated that reporting entities should not be required
to submit corrected returns if the information included on the return
is accurate at the time it is filed. The commenter recommended
alternatively that the requirement to file corrected returns should
apply for no more than 31 days after the end of the calendar year.
Other commenters suggested a cut-off of the corrected return
requirement of 30 days past the return filing due date.
Taxpayers require correct information to properly complete and file
their income tax returns. The IRS must be able to accurately match
information reporting with returns. Individuals are subject to the
section 5000A requirement to maintain minimum essential coverage on a
month-to-month basis. In the case of section 6055 reporting, a return
or statement may be incomplete or incorrect as a result of a change in
circumstances occurring after the coverage year has ended. For example,
a child born during a month may be enrolled in coverage retroactive to
the date of birth, or coverage may be retroactively cancelled due to a
failure to pay premiums. Accordingly, consistent with other information
reporting rules, the final regulations clarify that reporting entities
that fail to timely file corrected returns and furnish corrected
statements when information changes as a result of a change in
circumstances have filed returns that are incomplete or incorrect
within the meaning of sections 6721 and 6722.
5. Combined Reporting
Applicable large employer members that provide minimum essential
coverage on a self-insured basis are subject to the reporting
requirements of both section 6055 and section 6056, as well as the
requirement under section 6051 to file Form W-2, Wage and Tax
Statement, reporting wages paid to employees and taxes withheld. The
proposed regulations did not permit combining section 6055 reporting
with reporting for section 6056 or 6051. The proposed regulations
allowed the use of substitute forms for the statement to individuals,
which might have permitted reporting entities to combine section 6055
and section 6056 reporting for this purpose. The preamble to proposed
regulations under section 6056 (78 FR 54986) described a number of
proposals to simplify reporting under that section.
Commenters supported allowing combined section 6055 and section
6056 reporting for applicable large employer members sponsoring self-
insured plans, suggesting that there is significant duplication in the
information reported. Some commenters requested that combined reporting
be optional and that employers be permitted to combine reporting for
some employees but not others.
In response to these comments, the final regulations provide that
applicable large employer members will file a combined return and
statement for all reporting under sections 6055 and 6056. An applicable
large employer member that sponsors a self-insured plan will report on
Form 1095-C, completing both sections to report the information
required under sections 6055 and 6056. An applicable large employer
member that provides insured coverage also will report on Form 1095-C,
but will complete only the section of Form
[[Page 13225]]
1095-C that reports the information required under section 6056.
Section 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 under section 6055 on Form 1095-B. In
accordance with usual procedures, these forms will be made available in
draft form in the near future.
6. Statements Furnished to Individuals
a. Deceased Recipients
The proposed regulations provided that a reporting entity must
furnish a statement to each responsible individual reporting 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. 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, including him or
herself, in minimum essential coverage.
Commenters requested that the final regulations provide that a
statement is not required to be furnished to a covered individual who
dies during the year. The commenters suggested alternatively that a
statement should not be required for an individual who dies during the
first three months of a year who would be exempt from the shared
responsibility payment under section 5000A because of a short coverage
gap.
Under Sec. 1.5000A-1(a), the minimum essential coverage
requirement applies only to full months that an individual is alive.
However, section 5000A does not provide a general exemption from
coverage for the year of death and the coverage gap exception may not
apply if the gap began in the previous calendar year. Accordingly, to
ensure that minimum essential coverage is properly reflected on a
decedent's final income tax return and the estate is not held liable
for a section 5000A payment, the final regulations do not provide an
exception for a covered individual who dies during the year.
b. Time for Furnishing Statements
Section 6055 and the proposed regulations required a reporting
entity to furnish the statement on or before January 31 of the year
following the calendar year in which minimum essential coverage is
provided. Commenters requested that the final regulations permit
reporting entities to furnish statements within the last quarter of the
calendar year of coverage with other material required to be sent at
that time. The final regulations do not address furnishing a statement
during the coverage year. However, the section 5000A requirement
applies to each month during a calendar year, therefore a statement
provided early in the last calendar quarter would not report coverage
for those months. As a result, furnishing a statement before the end of
the year increases the risk of reporting information that changes after
the end of the year, potentially subjecting the reporting entity to
penalties.
A commenter requested that the final regulations provide procedures
for extending the time to furnish the section 6055 statement.
Accordingly, in response to this comment, like other information
reporting rules, the final regulations include rules allowing reporting
entities showing good cause the flexibility to apply for an extension
of time not exceeding 30 days to furnish statements.
A commenter requested that reporting entities be allowed to furnish
statements reporting employer-sponsored coverage with the employees'
Form W-2. Neither the final regulations nor regulations governing the
furnishing of Forms W-2 under Sec. 1.6051-1 prohibit mailing a 6055
statement with Form W-2. Accordingly, reporting entities may furnish
the Form 1095-B or 1095-C with the Form W-2 in the same mailing.
c. Mailing Address
The proposed regulations provided that, if mailed, the statement
required under section 6055 must be sent to the individual's last known
permanent address or, if no permanent address is known, to the
individual's temporary address.
Commenters asked that reporting entities be allowed to send
statements to an alternate address, such as an employer's address, for
individuals residing outside of the United States for whom the entity
does not have an address. Other commenters requested clarification that
the requirement to furnish a statement would be satisfied if a mailing
is returned to the sender.
The final regulations adopt the rule in the proposed regulations
requiring reporting entities to send statements to an individual's last
known address. The final regulations add a rule, however, that a
reporting entity's first class mailing to the recipient's last known
permanent address, or if no permanent address is known, the temporary
address, discharges the requirement to furnish the statement, even if
the statement is returned. A reporting entity that has no address for
an individual should send the statement to the address where the
individual is most likely to receive it, for example to the address the
reporting entity uses for requesting or providing information about the
coverage.
d. Electronic Furnishing of Statements
The proposed regulations permitted electronic furnishing of
statements to individuals if the recipient affirmatively consents.
Commenters requested that reporting entities be permitted to furnish
statements electronically unless the recipient requests paper
statements, arguing that most recipients have access to a computer.
Other commenters suggested that affirmative consent by the recipient
should not be required. A commenter suggested that the final
regulations provide rules for the electronic furnishing 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, which allows furnishing in paper or electronic form.
Statutory and regulatory tax information reporting rules uniformly
require a recipient's affirmative consent to receiving statements
electronically. See, for example, section 401 of the Jobs Creation and
Workers Assistance Act of 2002 (116 Stat. 21 (2002)); Sec. 1.401(a)-
21(b)(2); Sec. 31.6051-1(j)(2)(i); 2014 General Instructions for
Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498,
and W-2G), page 12. These rules protect individuals who do not have
access to or are not comfortable using a computer. Therefore,
consistent with general information reporting rules, the final
regulations do not permit reporting entities to furnish statements
electronically unless an individual affirmatively consents to
electronic furnishing.
The proposed regulations provided that consent to receive
statements electronically may be provided in any manner that reasonably
demonstrates that the recipient can access the statement in the
electronic format in which it will be furnished. Commenters suggested
that consent to electronic furnishing for other documents should be
treated as consent to electronic furnishing of the section 6055
statement. Other commenters requested that employers be allowed to post
a notice on the company's Web site advising employees that statements
are available and provide paper statements only on request.
Consent to receive a statement in electronic format must be in a
manner that reasonably demonstrates that the recipient is able to
access the statement
[[Page 13226]]
in the electronic format in which it will be furnished. See for example
Sec. 31.6051-1(j)(2)(i). The proposed and final regulations explicitly
allow statement recipients to provide consent and to access section
6055 statements in response to a notice on a Web site. A reporting
entity may simultaneously request consent to receive an electronic
section 6055 statement and consent regarding other statements. For
instance, a reporting entity may simultaneously request consent to
provide electronic statements for Forms W-2 and 1095, but each form
must be specifically referenced in the request. A general consent to
receive statements electronically does not reasonably demonstrate that
the recipient is able to access the section 6055 statement in an
electronic format and does not serve as consent to receive the section
6055 statement electronically.
e. Form of Statement
i. Information on the Statement
The proposed regulations provided that the statement furnished to
the responsible individual must include a contact phone number for the
person required to file the return. A commenter asked whether a
reporting entity may provide an automated response to inquiries if a
person ultimately is available. The final regulations do not prohibit
initial automated responses if a caller is able to reach a person
during the call.
A commenter requested that a reporting entity be permitted to
designate a third party to be the contact person. The final regulations
clarify that the statement only must include a phone number for a
person designated as the reporting entity's contact person. The final
regulations do not specify that the contact person must be a reporting
entity's employee or prohibit designating a third party as the contact
person.
ii. Substitute Statements
The proposed regulations permitted substitute statements if they
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, for example, Rev. Proc. 2012-38
(2012-48 IRB 575), see Sec. 601.601(d)(2) of this chapter.
Commenters expressed an interest in creating substitute statements
combining information reporting under sections 6055 and 6056 and
requested publication of a revenue procedure providing the
specifications. Other commenters asked that reporting entities be
allowed flexibility in customizing section 6055 statements in a style
recognizable to their recipients.
The final regulations permit the use of substitute statements under
section 6055 that conform to requirements provided in published
guidance. The IRS plans to provide these requirements in published
guidance or instructions. Employers submitting Forms 1095-C combining
reporting under sections 6055 and 6056 to the IRS also will report the
information required by those sections to the individuals in a single
statement.
Commenters requested that the final regulations allow reporting
entities to provide general rather than personalized information in the
section 6055 statement, for example ``You were covered by minimum
essential coverage for each month you were covered by the plan for at
least one day.'' While the final regulations do not adopt this comment,
it is anticipated that reporting entities will be able to check a box
on the information return to report that an individual was covered for
all 12 months of the calendar year.
e. TIN Matching Program
Commenters requested that the IRS TIN matching program, see Rev.
Proc. 2003-09 (2003-1 CB 516) and Sec. 601.601(d), include section
6055 reporting. The TIN matching program may be used only for
reportable payments subject to backup withholding under section 3406.
Therefore, TIN matching is not permitted for purposes of section 6055
reporting and the final regulations do not include section 6055
reporting in the TIN matching program.
7. Penalties
The proposed regulations applied to calendar years beginning after
December 31, 2014. Under Notice 2013-45 (2013-31 IRB 116), the IRS will
not apply penalties for failure to comply with section 6055 for 2014
(for coverage in 2014 and information returns filed and statements
furnished to covered individuals in 2015).
A commenter requested that the effective date of the section 6055
reporting requirements be extended an additional year if final
regulations are not released by January 1, 2014, thus requiring no
reporting in 2016 for coverage in 2015. Other commenters requested that
the IRS waive penalties for reporting in 2016 on 2015 coverage if a
reporting entity makes a good faith effort to comply. One commenter
requested that penalties be waived for the two years following the
release of final regulations.
In implementing new information reporting requirements, short-term
relief from penalties frequently is provided. This relief generally
allows additional time to develop appropriate procedures for collection
of data and compliance with these new reporting requirements. After
considering the comments received, the IRS will not impose penalties
under sections 6721 and 6722 on reporting entities that can show that
they have made good faith efforts to comply with the information
reporting requirements. Specifically, relief is provided from penalties
under sections 6721 and 6722 for returns and statements filed and
furnished in 2016 to report coverage in 2015, but only for incorrect or
incomplete information reported on the return or statement, including
TINs or dates of birth. No relief is provided in the case of reporting
entities that do not make a good faith effort to comply with these
regulations or that fail to timely file an information return or
furnish a statement. However, consistent with the existing information
reporting rules, reporting entities that fail to timely meet the
requirements of these regulations may be eligible for penalty relief if
the IRS determines that the standards for reasonable cause under
section 6724 are satisfied.
Effective/Applicability Date
These regulations 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 (including the provisions
requiring 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).
Taxpayers are encouraged, however, to voluntarily comply with
section 6055 information reporting for minimum essential coverage
provided in 2014. Given significant changes in the information
reporting provisions in response to commenters' feedback on the
proposed regulations, including requiring applicable large employer
members to file a return that combines section 6055 and section 6056
reporting, reporting entities that wish to voluntarily comply with the
section 6055 information reporting provisions for 2014 should build
their systems and report in accordance with these final regulations.
Real-world testing of reporting systems and plan designs, built in
accordance with the terms of
[[Page 13227]]
these final regulations, through voluntary compliance for 2014 will
contribute to a smoother transition to full implementation for 2015.
Special Analyses
It has been determined that these final regulations are 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.
Sections 603 and 604 of the Regulatory Flexibility Act (5 U.S.C.
chapter 6) (RFA) generally require agencies to prepare a regulatory
flexibility analysis addressing the impact of proposed and final
regulations, respectively, on small entities. Section 605(b) of the
RFA, however, provides that sections 603 and 604 do not apply if the
head of the agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities. It is hereby
certified that these regulations will not have a significant economic
impact on a substantial number of small entities.
Section 6055 requires a person that provides minimum essential
coverage to an individual to file a return with the IRS reporting
information specified by the statute and to furnish a statement
containing this information to an individual. These final regulations
implement the underlying statute and the economic impact is principally
a result of the underlying statute. Specifically, these final
regulations primarily provide the time and manner for filing and
furnishing the returns and statements that section 6055 requires.
Notice 2013-45 announced transition relief providing that
information reporting under section 6055 will be optional for 2014. The
notice advised that this relief would allow additional time for
dialogue with prospective reporting entities in an effort to simplify
the reporting requirements. Between publication of Notice 2013-45 and
publication of the proposed regulations under section 6055, the IRS and
the Treasury Department engaged in a series of discussions with
employers, health insurance issuers, and other reporting entities. The
proposed and final regulations address certain concerns expressed in
those discussions.
These final regulations minimize the burden associated with the
collection of information imposed by section 6055 in a number of ways.
The regulations limit reporting to only the information that the IRS
will use to verify minimum essential coverage and administer the
premium tax credit, all of which is specified in the statute. For
example, the regulations do not require reporting the amount of advance
payments of the premium tax credit and cost-sharing reductions or the
amount of the premium for employer coverage paid by an employer.
Similarly, the only information the regulations require for
administration of the small employer health insurance credit under
section 45R is whether a qualified health plan was enrolled in through
an Exchange. The final regulations reduce burden for applicable large
employer members by allowing combined reporting under sections 6055 and
6056. The final regulations allow for substitute statements, furnishing
of statements with Forms W-2, and electronic delivery consistent with
other information reporting rules. Finally, the final regulations
relieve health insurance issuers from reporting for individual market
qualified health plans enrolled in through an Affordable Insurance
Exchange because Exchanges will report on these enrollments under
section 36B(f)(3).
Based on these facts, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act is not required.
Pursuant to section 7805(f) of the Code, the notice of proposed
rulemaking that preceded these final regulations was submitted to the
Chief Counsel for Advocacy of the Small Business Administration for
comment on its impact on small business.
Drafting Information
The principal author of these final regulations is Andrew Braden 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.
26 CFR Part 602
Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1, 301, and 602 are 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 transmittal and furnish statements to
responsible individuals 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)).
[[Page 13228]]
(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. The term responsible individual
includes a primary insured, employee, former employee, uniformed
services sponsor, parent, or other related person named on an
application who enrolls one or more individuals, including him or
herself, in minimum essential coverage.
(12) Taxpayer identification number. The term taxpayer
identification number (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) in the case of
an employer described in paragraph (f)(4)(i) of this section),
including each participating employer with respect to a self-insured
group health plan or arrangement established or maintained by more than
one employer (and not including a multiemployer plan as defined in
section 3(37) of ERISA or 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)(i)(A)
through (c)(2)(i)(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 and must retain a copy of the designation in its books and
records. 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,
including Medicare Advantage) 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 Directive 5100.01, Functions of the Department of Defense and
Its Major Components (December 21, 2010)) 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) 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 reporting is required under
paragraph (a) of this section for minimum essential coverage that
provides benefits in addition or as a supplement to a health plan or
arrangement that constitutes minimum essential coverage if--
(i) The primary and supplemental coverages have the same plan
sponsor; or
(ii) The coverage supplements government-sponsored coverage (as
defined in section 5000A(f)(1)(A) and the regulations under that
section) such as Medicare.
(3) Individuals not enrolled in coverage. No reporting is required
under this section for coverage offered to individuals who do not
enroll.
(e) 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) The name, address, and employer identification number (EIN) of
the
[[Page 13229]]
reporting entity required to file the return;
(ii) The name, address, and TIN, or date of birth if a TIN is not
available, of the responsible individual, except that reporting
entities may but are not required to report the TIN of a responsible
individual not enrolled in the coverage;
(iii) The name and TIN, or date of birth if a TIN is not available,
of each individual who is 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 (e)(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) The 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.
(f) Time and manner 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 as specified in forms
or instructions. For extensions of time for filing returns under this
section see Sec. Sec. 1.6081-1 and 1.6081-8. See Sec. 301.6011-2 of
this chapter for rules relating to electronic filing.
(2) Form of return--(i) Applicable large employer members. A
reporting entity that is reporting under section 6055 as an applicable
large employer member (as defined in Sec. 54.4980H-1(a)(5) of this
chapter) makes the return required under this paragraph (f) on Form
1094-C and Form 1095-C or other form designated by the Internal Revenue
Service.
(ii) Reporting entities not reporting as applicable large employer
members. Entities reporting as health insurance issuers or carriers,
sponsors of self-insured group health plans that are not reporting as
applicable large employer members, sponsors of multiemployer plans, and
providers of government-sponsored coverage, will report under section
6055 on Form 1094-B and Form 1095-B or other form designated by the
Internal Revenue Service.
(iii) Substitute forms. Reporting entities may make the return
required under this paragraph (f) 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 responsible 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. For purposes of the penalty under section 6722,
furnishing a statement to the responsible individual is treated as
furnishing a statement to the payee. The statement must show--
(i) The phone number for a person designated as the reporting
entity's contact person and policy number, if any; and
(ii) Information described in paragraph (e) of this section
required to be shown on the section 6055 return for the responsible
individual and each covered 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 a copy of the return filed with the Internal Revenue Service
or on a substitute statement. A substitute statement must include the
information required to be shown on the return filed with the Internal
Revenue Service and must comply with requirements in published guidance
(see Sec. 601.601(d)(2) of this chapter) relating to substitute
statements. An Internal Revenue Service truncated taxpayer
identification number may be used as the identification number for an
individual in lieu of the identification number appearing on the
corresponding information return filed with the Internal Revenue
Service.
(4) Time and manner for furnishing statements--(i) Time for
furnishing--(A) In general. 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.
(B) Extensions of time--(1) In general. For good cause upon written
application of the person required to furnish statements under this
section, the Internal Revenue Service may grant an extension of time
not exceeding 30 days in which to furnish these statements. The
application must be addressed to the Internal Revenue Service, and must
contain a full recital of the reasons for requesting the extension to
aid the Internal Revenue Service in determining the period of the
extension, if any, that will be granted. A request in the form of a
letter to the Internal Revenue Service, signed by the applicant,
suffices as an application. The application must be filed on or before
the date prescribed in paragraph (g)(4)(i)(A) of this section.
(2) Automatic extension of time. The Commissioner may, in
appropriate cases, prescribe additional guidance or procedures,
published in the Internal Revenue Bulletin (see Sec. 601.601(d)(2) of
this chapter), for automatic extensions of time to furnish to one or
more individuals the statement required under section 6055.
(ii) Manner of furnishing. If mailed, the statement must be sent to
the responsible individual's last known permanent address or, if no
permanent address is known, to the individual's temporary address. For
purposes of this paragraph (g)(4), a reporting entity's first class
mailing to the last known permanent address, or if no permanent address
is known, the temporary address, discharges the requirement to furnish
the statement. A reporting entity may furnish the statement
electronically if the requirements of Sec. 1.6055-2 are satisfied.
(h) Penalties--(1) In general. For provisions relating to the
penalty for failure to file timely a correct information return
required under section 6055, see section 6721 and the regulations under
that section. For provisions relating to the penalty for failure to
furnish timely a correct statement to responsible individuals required
under section 6055, see section 6722 and the regulations under that
section. See section 6724 and the regulations under that section for
rules relating to the waiver of penalties if a failure to file timely
or accurately is due to reasonable cause and is not due to willful
neglect.
(2) Application of section 6721 and 6722 penalties to section 6055
reporting.
[[Page 13230]]
For purposes of section 6055 reporting, if the information reported on
a return (including a transmittal) or a statement required by this
section is incomplete or incorrect as a result of a change in
circumstances (such as a retroactive change in coverage), a failure to
timely file or furnish a corrected document is a failure to file or
furnish a correct return or statement under sections 6721 and 6722.
(i) [Reserved.]
(j) 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 for failure to comply
with the section 6055 reporting requirements for coverage in 2014 (for
information returns filed and statements furnished in 2015).
Sec. 1.6055-2 Electronic furnishing of statements
(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 consent requirement of this
paragraph (a)(2) is not satisfied if the recipient withdraws the
consent and the withdrawal takes effect before the statement is
furnished. The furnisher may provide 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. The furnisher also may provide that a
recipient's request for a paper statement will be treated as a
withdrawal of the recipient's consent.
(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 from the
recipient, in the manner described in paragraph (a)(2)(ii) of this
section, a new consent or confirmation of consent to receive the
statement electronically.
(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
electronically. The email attachment uses the same electronic format
that F will use for the 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 statement electronically. The consent via the
secure Web page uses the same electronic format that F will use for
electronically furnishing the statement. 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 date of 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
[[Page 13231]]
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. If the furnisher has corrected a
recipient's statement and the original statement was furnished
electronically, the furnisher must furnish a corrected statement to the
recipient 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 furnished in 2015).
0
Par. 3. Section 1.6081-8 is amended in paragraph (a) by adding the
language ``1095 series,'' between the words ``1042-S,'' and ``1098''.
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 301.6011-2 is amended in the first sentence of
paragraph (b)(1) by adding ``1094 series, 1095 series,'' after ``1042-
S''.
0
Par. 6. Section 301.6721-1 is amended by removing the word ``or'' at
the end of paragraph (g)(3)(xxii), removing the period and adding a
semi-colon in its place at the end of 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'' at
the end of paragraph (d)(2)(xxxi), removing the period and adding a
semi-colon in its place at the end of 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).
* * * * *
PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 8. The authority citation for part 602 continues to read as
follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 9. In Sec. 602.101, paragraph (b) is amended by adding two
entries in numerical order to the table to read as follows:
Sec. 602.101 OMB Control numbers.
* * * * *
(b) * * *
------------------------------------------------------------------------
Current OMB
CFR part or section where identified and described control No.
------------------------------------------------------------------------
* * * * *
1.6055-1................................................ 1545-2252
1.6055-2................................................ 1545-2252
* * * * *
------------------------------------------------------------------------
* * * * *
John Dalrymple,
Deputy Commissioner for Services and Enforcement.
Approved: March 2, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-05051 Filed 3-5-14; 4:15 pm]
BILLING CODE 4830-01-P