August 29, 2014
IRS Releases Instructions for PPACA Information Reporting Forms
The Internal Revenue Service (IRS) released long-awaited instructions for the forms to be used by applicable large employers and insurers for reporting information regarding health care coverage and “minimum essential coverage” as required under the Patient Protection and Affordable Care Act (PPACA). The IRS also issued Questions-and-Answers documents regarding information reporting by health coverage providers and reporting of offers of health insurance coverage by employers.The FAQs provide a summary of who is required to report, what information must be reported and how and when to report.
The forms are to be used to fulfill the requirements specified in final regulations implementing the reporting of minimum essential coverage (MEC) under Section 6055 of the Internal Revenue Code) and the reporting of health insurance coverage under Section 6056 of the Internal Revenue Code. These reporting requirements were delayed for 2014 under previously issued Notice 2013-45 transition relief and will not be effective until 2015, making the first required reporting due in early 2016 (though the IRS is encouraging voluntary reporting for coverage in 2014).
Code Section 6055 requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and other entities that provide minimum essential coverage to file annual returns reporting certain information for each individual for whom minimum essential coverage is provided and to provide a copy of the return to the individual. Form 1095-B is to be used to comply with Code Section 6055. Form 1094-B is to be used to transmit these returns to the IRS. An employer that sponsors a insured health plan will not report as a provider of health coverage under section 6055. The health insurance carrier is responsible for reporting that coverage.
Theinstructions for Forms 1094-B and 1095-B are to be used for:
Code Section 6056 requires every applicable large employer (generally, an employer that employed on average at least 50 full-time employees or equivalents) to file a return with the IRS that reports the terms and conditions of the health care coverage provided to the employer's full-time employees during the year. Form 1095-C is to be used to satisfy this requirement. Form 1094-C is to be used to transmit these returns. An applicable large employer that provides self-insured coverage is subject to the reporting requirements of both sections 6055 and sections 6056. As discussed in the IRS FAQs on Information Reporting by Health Care Providers (Section 6055), FAQ 27, such employers will combine section 6055 and 6056 reporting on Form 1095-C.
The newly released instructions for Forms 1094-C and 1095-C are to be used for:
- Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return
- Form 1095-C: Employer Provided Health Insurance Offer and Coverage
Also on August 28, the IRS issued a draft Form 1095-A, Health Insurance Marketplace Statement, and instructions. Health Insurance Marketplaces (also known as health exchanges) must file Form 1095-A to report information on all enrollments in qualified health plans through the Marketplaces. The purpose of the Form 1095-A is to report information to the IRS about family members who enroll in a qualified health plan through the Marketplace. Form 1095-A is also furnished to individuals to allow them to claim the premium tax credit, to reconcile the credit on their returns with advance payment of the premium tax credit and to file an accurate tax return.
The IRS also updated its Form 1040, the U.S. Individual Income Tax Return, to add a new Line 61 in which taxpayers would indicate whether they have full-year health coverage or if they will be liable for the “individual responsibility” mandate penalty.
The IRS is accepting comments on the draft forms. Comments may be submitted on the Comment on Tax Forms and Publications page on IRS.gov. Although no comment deadline is identified, comments should be submitted as soon as possible as final forms are expected to be posted by the end of the year.
To provide input for possible Council comments on the draft forms, or for more information, contact Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.