The IRS has issued proposed regulations on the individual mandate reporting requirements under section 6055 of the Internal Revenue Code. To a significant degree, the new regulations reflect guidance previously published by the IRS. Although the rules are only proposed, health plan sponsors may generally rely on them now.
The new guidance addresses several discrete topics relating to the reporting requirements, including:
- The permissible use of truncated Employer Identification Numbers in statements to plan participants.
- Relief in certain situations where reporting would be duplicative. For example, when an individual has minimum essential coverage under more than one plan maintained by the same plan sponsor, the plan sponsor will need to report for only one of the plans. If an employee may enroll in a Health Reimbursement Arrangement (HRA) only if the employee also enrolls in an employer’s insured minimum coverage medical plan, the insurer will need to report the individual’s coverage in the medical plan, but the employer will not need to report the individual’s HRA coverage.
- Guidance on the efforts that must be made to obtain the Social Security number of a plan participant, where an individual fails to provide the number or provides a number that is incorrect. The rules allow a birth date to be used in place of the Social Security number, but only if a plan sponsor requests the Social Security number at least three different times. The guidance generally allows the first solicitation to be timed to the enrollment process, the second to be made within 75 days of the first, and the third to be made by the end of the calendar year following the first solicitation. The guidance accompanying the regulations suggests that plan sponsors that have not yet made an initial solicitation should make one within a reasonable time.
Although the guidance does not address the timing of the reports themselves, plan sponsors should keep in mind that the automatic extension for the reports under sections 6055 and 6056 of the Internal Revenue Code applied only to the reports filed earlier this year for coverage provided in 2015. For coverage provided in 2016, plan sponsors will need to gear up to issue statements to individuals by January 31, 2017, and to file reports with the IRS by February 28, 2017, (March 31, 2017, if filing electronically).
As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.