The IRS issued two related proposed regulation projects on health care coverage reporting requirements under the Patient Protection and Affordable Care Act, P.L. 111-148. One set of proposed regulations gives guidance to providers of minimum essential health coverage that are subject to the information-reporting requirements of Sec. 6055 (REG-132455-11). The other set gives guidance to employers subject to the information-reporting requirements of Sec. 6056 (REG-136630-12).
Sec. 6055 requires providers of minimum essential coverage and providers of coverage through an employer’s group health plan to report information that 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.
Sec. 6056 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.
Treasury and the IRS asked for comments on the requirements last year and say they have engaged in a dialogue with stakeholders to figure how to simplify Sec. 6055 and Sec. 6056 reporting consistent with effective implementation of the law. The IRS recently delayed the effective dates for reporting under both Secs. 6055 and 6056 to 2015, although it is encouraging voluntary reporting during 2014 (see News Notes, “IRS Postpones Large-Employer Health Care Penalty and Information-Reporting Requirements,” 44 The Tax Adviser 571 (September 2013)).
Both sets of proposed regulations discuss the possibility of combined reporting under Secs. 6051 (requiring W-2 reporting), 6055, and 6056, but the regulation projects do not institute full combined reporting. They do discuss how to avoid duplicate reporting under the requirements for those sections.
The proposed regulations under Sec. 6055 clarify:
- Who is subject to the information-reporting requirement;
- What information is required to be reported;
- The time and manner of filing;
- Statements that must be furnished to individuals; and
The regulations propose placing returns under Secs. 6055 and 6056 within the definitions of information return and payee statement under Secs. 6721 and 6722.
The proposed regulations under Sec. 6056:
- Define key terms;
- Discuss the responsibilities of applicable large employers with respect to full-time employees;
- Describe the content, manner, and timing of information required to be reported to the IRS and furnished to full-time employees; and
- Define the person responsible for Sec. 6056 reporting.
The preamble to the proposed Sec. 6056 regulations discusses a variety of potential simplified reporting methods that the IRS is considering. These include allowing employers to report on Form W-2, Wage and Tax Statement, and eliminating the need to determine full-time employees if minimum essential coverage is offered to all potentially full-time employees.
Both sets of regulations are proposed to apply for calendar years beginning after Dec. 31, 2014. Consistent with Notice 2013-45, reporting entities will not be subject to penalties for failure to comply with the Secs. 6055 and 6056 reporting requirements for coverage in 2014.