IRS PROPOSES RELIEF FOR SOME ACA REPORTING DUTIES

 

Tax Form

The Internal Revenue Service is attempting to simplify minimum essential health-care coverage reporting requirements under the Affordable Care Act, via July 29 proposed rules.  

The proposed rules, which only apply to tax code Section 6055,would replace the supplemental coverage rule which has “proven to be confusing,” the IRS said in the proposed rules (REG-103058-16, RIN:1545-BN23).  

Under the proposed rules, reporting would only be required for one plan or program if an individual is covered by more than one minimum essential coverage plan or program provided by the same company. Additionally, minimum essential coverage reporting would not be required for an individual if the individual is also covered by other minimum essential coverage that requires reporting under Section 6055.  

The ACA added Section 6055 to the tax code to track compliance via reporting requirements on entities that provide minimum essential coverage.  

The proposed rules also would require health insurance issuers of catastrophic plans to report catastrophic plan coverage on Form 1095-B.  

This requirement closes a loophole by clarifying that required reporting of minimum essential coverage includes catastrophic plans in which an individual enrolls through an Exchange.  

The IRS also proposed that a reporting entity be treated as acting in a responsible manner, and thus not subject to penalties, for properly requesting a taxpayer identification number, even if it doesn't receive the TIN number.  

The IRS said properly requesting a TIN includes an initial request and two subsequent annual requests.  

To address confusion regarding when an initial request should be made, the proposed rules state that the initial TIN request must be made by Dec. 31 of the year the account is opened, or Jan. 31 of the following calendar year for accounts opened in December.  

For 2016 reporting, there is a $260 penalty for each failure on an information return, such as not including the proper identification number.

If adopted, catastrophic plan reporting requirements would become effective for calendar years beginning after Dec. 31, 2016. All other proposed regulations would be applicable for taxable years ending after Dec. 31, 2015.  

Comments and hearing requests on the proposed rules are due by Oct. 3.  

This post has been corrected to reflect 2016 penalty amounts.

See related story, IRS Offers Relief on Employer Health Insurance Reporting Rules.

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