REG-132455-11 - Reporting of Minimum Essential Coverage (NPRM)

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+ $150). Accordingly, the transaction is not
a loss importation transaction within the
meaning of § 1.362–3(c)(3) and DC’s bases in
the importation property is not determined
under section 362(e)(1).
(C) Application of section 362(e)(2) and
this section: FC1. Notwithstanding that the
transfers by FC1 and FC2 are pursuant to a
single plan forming one transaction, section
362(e)(2) and this section apply to each
transferor separately.
(1) Analysis. (i) Loss duplication
transaction. FC1’s transfer of Asset 1 and
Asset 2 is a transaction described in section
362(a). But for section 362(e)(2) and this
section, DC’s aggregate basis in those assets
would be $200 ($80 + $120), which would
exceed the aggregate value of the assets $160
($50 + $110) immediately after the
transaction. Accordingly, the transfer is a loss
duplication transaction and FC1 has a net
built-in loss of $40 ($200—$160).
(ii) Identifying loss duplication property.
But for section 362(e)(2) and this section,
DC’s basis in Asset 1 would be $80, which
would exceed Asset 1’s $50 value
immediately after the transaction.
Accordingly, Asset 1 is loss duplication
property. But for section 362(e)(2) and this
section, DC’s basis in Asset 2 would be $120,
which would exceed Asset 2’s $110 value
immediately after the transaction.
Accordingly, Asset 2 is also loss duplication
property.
(2) Basis in loss duplication property. DC’s
basis in Asset 1 is $50, computed as its $80
basis under section 362(a) reduced by $30, its
allocable portion of FC1’s $40 net built-in
loss ($80/$200 × $40). DC’s basis in Asset 2
is $110, computed as its $120 basis under
section 362(a) reduced by $10, its allocable
portion of FC1’s $40 net built-in loss ($120/
$200 × $40).
(3) Basis in other property. Under section
358(a), FC1 has an exchanged basis of $200
in the DC stock it receives in the transaction.
(D) Application of section: FC2. FC2’s
transfer of Asset 3 is not a loss duplication
transaction because Asset 3’s value exceeds
its basis immediately after the transaction.
Accordingly, under section 362(a), DC’s basis
in Asset 3 is $100.

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*

*
*
*
*
(j) * * * The introductory text and
Example 11 of paragraph (h) of this
section apply to transactions on or after
the date these regulations are published
as final regulations in the Federal
Register unless effected pursuant to a
binding agreement that was in effect
prior to that date and at all times
thereafter; however, taxpayers may
apply such provisions to transactions
occurring after October 22, 2004.
■ Par. 10. Section 1.368–3 is amended
by revising paragraphs (a)(3), (b)(3) and
adding a sentence to the end of
paragraph (e) to read as follows:
§ 1.368–3 Records to be kept and
information to be filed with returns.

(a) * * *
(3) The value and basis of the assets,
stock or securities of the target

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corporation transferred in the
transaction, determined immediately
before the transfer and aggregated as
follows—
(i) Importation property transferred in
a loss importation transaction, as
defined in §§ 1.362–3(c)(2) and 1.362–
3(c)(3), respectively;
(ii) Loss duplication property as
defined in § 1.362–4(c)(1);
(iii) Property with respect to which
any gain or loss was recognized on the
transfer (without regard to whether such
property is also identified in paragraph
(a)(3)(i) or (a)(3)(ii) of this section);
(iv) Property not described in
paragraphs (a)(3)(i), (a)(3)(ii) or (a)(3)(iii)
of this section; and
*
*
*
*
*
(b) * * *
(3) The value and basis of all the stock
or securities of the target corporation
held by the significant holder that is
transferred in the transaction and such
holder’s basis in that stock or securities,
determined immediately before the
transfer and aggregated as follows—
(i) Stock and securities with respect to
which an election is made under section
362(e)(2)(C); and
(ii) Stock and securities not described
in paragraph (b)(3)(i) of this section.
*
*
*
*
*
(e) Effective/applicability date. * * *
Paragraphs (a)(3) and (b)(3) of this
section apply to any taxable year
beginning on or after these regulations
are published as final regulations in the
Federal Register, unless effected
pursuant to a binding agreement that
was in effect prior to that date and at all
times thereafter.
Beth Tucker,
Deputy Commissioner for Operations
Support.
[FR Doc. 2013–21662 Filed 9–6–13; 8:45 am]
BILLING CODE 4830–01–P

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 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
related statements to covered
individuals. These proposed regulations
affect health insurance issuers,
employers, governments, and other
persons that provide minimum essential
coverage to individuals.
DATES: Written or electronic comments
must be received by November 8, 2013.
Requests to speak and outlines of topics
to be discussed at the public hearing
scheduled for November 19, 2013, at 10
a.m., must be received by November 8,
2013.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–132455–11), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered Monday through
Friday between the hours of 8 a.m. and
4 p.m. to CC:PA:LPD:PR (REG–132455–
11), Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically
via the Federal eRulemaking Portal at
http://www.regulations.gov (IRS REG–
132455–11).
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Andrew Braden, (202) 622–4960;
concerning the submission of comments
and/or to be placed on the building
access list to attend the public hearing,
Oluwafunmilayo (Funmi) Taylor, (202)
622–7180 (not toll-free calls).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[REG–132455–11]
RIN 1545–BL31

Information Reporting of Minimum
Essential Coverage
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:

This document contains
proposed regulations providing

SUMMARY:

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The collection of information
contained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)). Comments on the collection of
information should be sent to the Office
of Management and Budget, Attn: Desk
Officer for the Department of the
Treasury, Office of Information and
Regulatory Affairs, Washington, DC
20503, with copies to the Internal
Revenue Service, Attn: IRS Reports
Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by

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November 8, 2013. Comments are
specifically requested concerning:
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the IRS,
including whether the information will
have practical utility;
How the quality, utility, and clarity of
the information to be collected may be
enhanced;
How the burden of complying with
the proposed collection of information
may be minimized, including through
the application of automated collection
techniques or other forms of information
technology; and
Estimates of capital or start-up costs
and costs of operation, maintenance,
and purchase of services to provide
information.
The collection of information in these
proposed regulations is in §§ 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 section
6055 of the Code. The likely
respondents are health insurers, selfinsured employers or other sponsors of
self-insured health plans, and
governments that provide minimum
essential coverage.
The burden for the collection of
information contained in these
proposed 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 proposed
regulation.
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.
Background
Beginning in 2014, under 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)) (collectively, the Affordable Care
Act), nonexempt individuals have the
choice of maintaining minimum
essential coverage (as defined in section
5000A(f)) or paying an individual
shared responsibility payment with
their income tax returns. Minimum
essential coverage may be health
insurance coverage offered in the
individual market (such as a qualified
health plan offered through an
Affordable Insurance Exchange

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(Exchange, also known as a
Marketplace)), an employer-sponsored
plan, or a government-sponsored
program. Section 5000A(f)(1)(A)
specifies that Medicare Part A,
Medicaid, the Children’s Health
Insurance Program established under
title XXI of the Social Security Act (42
U.S.C. 1397aa et seq.) (CHIP), TRICARE,
certain health care programs for
veterans and other individuals under
chapter 17 or 18 of Title 38 U.S.C.,
coverage for Peace Corps volunteers
under 22 USC 2504(e), and coverage
under the Nonappropriated Fund Health
Benefits Program under section 349 of
Public Law 103–337, are governmentsponsored programs that qualify as
minimum essential coverage.
Section 1401 of the Affordable Care
Act enacted section 36B, allowing
certain taxpayers a refundable premium
tax credit that will make minimum
essential coverage in qualified health
plans offered in the individual market
through an Exchange more affordable.
Section 1502 of the Affordable Care
Act enacted section 6055 regarding
information reporting by any person
that provides minimum essential
coverage to an individual. Section
6055(b)(1)(B) requires providers of
minimum essential coverage to report
(1) the name, address, and taxpayer
identification number (TIN) of the
primary insured, (2) the name, dates of
coverage, and TIN of each individual
covered under a policy, (3) whether
health insurance coverage is a qualified
health plan offered through an
Exchange, (4) for a qualified health plan,
the amount of any advance payments of
the premium tax credit under section
1412 of the Affordable Care Act and
cost-sharing reductions under section
1402 of the Affordable Care Act, and (5)
other information the Secretary requires.
Section 6055(b)(2) requires, for
coverage through an employer’s group
health plan, reporting (1) the name,
address, and employer identification
number (EIN) of the employer
maintaining the plan, (2) the portion of
the premium (if any) paid by the
employer, and (3) any other information
that the Secretary requires for
administering the credit under section
45R (the tax credit for employee health
insurance expenses of small employers).
Section 6055(c) directs a person filing
an information return under section
6055 to provide a written statement to
each individual listed on the return that
shows the name, address, and contact
phone number of the reporting entity
and information reported to the IRS for
that individual. The statement must be
furnished to the individual by January

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31 of the year following the coverage
year.
The information reported under
section 6055 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.
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) and
failure to furnish correct payee
statements (section 6722). However,
these penalties may be waived if the
failure was due to reasonable cause and
not to willful neglect (section 6724(a)).
Section 1514 of the Affordable Care
Act enacted section 6056, which
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.
Notice 2012–32 (2012–20 IRB 910)
requested public comments on issues to
be addressed in regulations under
section 6055. In addition, Notice 2012–
33 (2012–20 IRB 912) requested public
comments on issues to be addressed in
regulations under section 6056. As
described later in this preamble, the
written comments in response to Notice
2012–32 and other written comments
have been considered in connection
with the development of these proposed
regulations.
As discussed in Notice 2013–45
(2013–31 IRB 116), Treasury and the IRS
have engaged in dialogue with
stakeholders in an effort to simplify
section 6055 (and section 6056)
reporting consistent with effective
implementation of the law. This process
has included discussions with
stakeholders representing a wide range
of interests to assist in the consideration
of effective information reporting rules
that will be as streamlined, simple, and
workable as possible. The effort to
develop these proposed information
reporting rules has reflected a
considered balancing of the importance
of (1) providing individuals the
information to complete their tax
returns accurately, including with
respect to the individual responsibility
provisions and eligibility for the
premium tax credit, (2) minimizing cost
and administrative tasks for the
reporting entities and individuals, and
(3) providing the IRS with information
needed for effective and efficient tax
administration. As noted elsewhere in

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this preamble, the proposed regulations
will be the subject of public comments,
including comments that are
specifically invited regarding particular
issues identified in the preamble.
Notice 2013–45 provides as transition
relief that section 6055 information
reporting will be optional for 2014. The
IRS will not impose penalties for failure
to timely and accurately report under
section 6055 for coverage in 2014. As
stated in Notice 2013–45, the IRS
encourages voluntary section 6055
reporting for coverage in 2014.
Explanation of Provisions and
Summary of Comments
1. Persons Subject to Information
Reporting Requirement

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a. Plans in the individual market
Under section 36B(f)(3) and § 1.36B–
5, an Exchange must report information
relating to enrollment in qualified
health plans in the individual market to
the IRS and taxpayers. This information
includes the period coverage was in
effect, the names and TINs of each
individual covered, the amount of
advance credit payments relating to the
coverage, and the amount of premiums
for the coverage. This reporting
facilitates compliance with and
administration of the premium tax
credit under section 36B. A commenter
suggested that issuers of qualified health
plans should not be required to report
under section 6055 regarding minimum
essential coverage that they provide in
the individual market through the
Exchange because the Exchange
reporting provides the IRS and
taxpayers with the necessary
information about this coverage.
In response to this comment and to
reduce the burden associated with
reporting under section 6055, the
proposed regulations provide that
issuers are not required to submit
section 6055 information returns for
coverage under a qualified health plan
in the individual market enrolled in
through an Exchange. For individuals
enrolled in this coverage, the IRS and
individuals will receive information
necessary to administer or comply with
the individual shared responsibility
provision through information reporting
by Exchanges under section 36B(f)(3).
Issuers must report, however, on
qualified health plans in the small
group market enrolled in through the
Small Business Health Options Program
(SHOP), because annual information
reporting by Exchanges under section
36B(f)(3) does not include these plans.

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b. Employer-sponsored Insured Group
Health Plans
Commenters recommended that the
proposed regulations require employers
rather than health insurance issuers to
report under section 6055 for insured
coverage under an employer-sponsored
group health plan. The commenters
suggested that employers have more
direct access to information required to
be reported for an employee enrolled in
a group health plan.
Because section 6055(a) requires
reporting by the entities providing the
coverage, which for insured coverage is
the issuer, the proposed regulations
provide that health insurance issuers are
responsible for reporting under section
6055 for all insured coverage, except
coverage under certain governmentsponsored programs (such as Medicaid
and Medicare) that provide coverage
through a health insurance issuer and
coverage under qualified health plans in
the individual market enrolled in
through an Exchange.
Reporting entities are permitted to use
third parties to facilitate filing returns
and furnishing statements to comply
with reporting requirements, including
those under section 6055. These
arrangements do not, however, transfer
the potential liability for failure of the
reporting entity to report and furnish
under the regulations.
A party preparing returns or
statements required under section 6055
that is a tax return preparer will be
subject to the requirements that
generally apply to return preparers.
c. Self-insured Group Health Plans
The proposed regulations provide that
sponsors of self-insured health coverage
are responsible for reporting under
section 6055. The proposed regulations
identify the employer as the plan
sponsor and reporting entity for a selfinsured group health plan established or
maintained by a single employer. This
rule is consistent with section
3(16)(B)(i) of the Employee Retirement
Income Security Act of 1974 (ERISA),
which states that the term ‘‘plan
sponsor’’ means the employer in the
case of an employee benefit plan
established or maintained by a single
employer.
Commenters noted that individuals
may be covered under a self-insured
arrangement that is a multiemployer
plan and offered suggestions for
identifying the entity responsible for
reporting. Some commenters stated that
employers that participate in a
multiemployer plan do not have access
to the information required to be
reported under section 6055 and that

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the multiemployer plan or its
administrator, for example, the joint
board of trustees, should report for the
participating employers. Another
commenter suggested that labor unions
report for multiemployer plans. Other
commenters asserted that a plan’s
administrator or trustees generally are in
the best position to report minimum
essential coverage funded under a
collective bargaining agreement unless
the plan is funded by a single employer.
A commenter asserted that each
participating employer should be
responsible for reporting under section
6055 for a multiple employer welfare
arrangement (MEWA) under section
3(40) of ERISA (29 U.S.C. 1002(40)).
In response to these comments, the
proposed regulations identify the
sponsor and reporting entity for various
types of self-insured arrangements (for
example, the joint board of trustees for
a multiemployer plan). For these
purposes, the section 414 employer
aggregation rules do not apply.
Accordingly, a self-insured group health
plan or arrangement covering employees
of related corporations is treated as
sponsored by more than one employer
and each employer must report for its
employees. However, one member of the
group may assist the other members by
filing returns and furnishing statements
on behalf of all members.
Section 6055(d) provides that an
appropriately designated person may
report under section 6055 on behalf of
a government employer. Accordingly,
the proposed regulations allow a
government employer providing selfinsured coverage for its employees to
report under section 6055 on its own
behalf or to designate as the reporting
entity another governmental unit or
agency or instrumentality of a
governmental unit that is part of or
related to the same governmental unit as
the government employer. If the
designation is made before the filing
deadline and the designee accepts it, the
designated governmental unit, agency,
or instrumentality is the sponsor
responsible for section 6055 reporting.
Comments are requested on issues
specific to government employer plans
and arrangements.
As noted, section 6056 requires
applicable large employers to report
information about the coverage that they
offer to their full-time employees and to
furnish related statements to employees.
Commenters suggested that applicable
large employers with self-insured health
plans that must report under both
sections 6055 and 6056 should be
allowed to combine that reporting.
The general rules described in the
proposed regulations assume separate

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reporting, but include other rules that
reduce duplicative reporting and
otherwise simplify reporting. For
example, the proposed regulations allow
the use of substitute forms and
statements to individuals, which may
permit self-insured health plans to
furnish a single substitute statement to
covered individuals for both sections
6055 and 6056.
In addition, the preamble to proposed
regulations under section 6056 advises
that the IRS and the Treasury
Department are considering permitting
applicable large employers with selfinsured plans that provide mandatory,
minimum value coverage to employees,
and offer that coverage to spouses and
dependents, all with no employee
contribution, to forgo providing section
6056 statements to those covered
employees. Because the section 6055
return would provide the individual
taxpayers information to accurately file
the taxpayers’ income tax returns, and
would provide the IRS the information
concerning those employees to
administer the premium tax credit and
employer shared responsibility
provisions, Treasury and the IRS are
considering whether for those
employees the employer could file and
furnish only the return required under
section 6055 and include a code on the
employees’ Forms W–2.
Comments are requested on other
ways to simplify and combine reporting.

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d. Foreign Employers That Provide
Minimum Essential Coverage
Section 6055(b)(2)(A) requires that
reporting for coverage under a group
health plan include the employer’s EIN.
A commenter noted that a foreign
employer may provide minimum
essential coverage but may not have an
EIN. Comments are requested on rules
for reporting by foreign employers
without EINs that sponsor self-insured
plans and on any other issues specific
to reporting coverage provided by
foreign employers.
e. Government-Sponsored Programs
The proposed regulations provide that
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)) is responsible for
reporting under section 6055. For
example, the Department of Defense is
responsible for reporting coverage under
the TRICARE program. The proposed
regulations identify the State agency
that administers the Medicaid or CHIP
program, rather than the Department of
Health and Human Services, as the
reporting entity for these programs.

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Additionally, under the proposed
regulations, the responsible government
department or agency, and not the
issuer, is the reporting entity for
coverage under a government-sponsored
program provided through a health
insurance issuer (such as some
Medicaid, CHIP, and Medicare
programs). Comments are requested on
issues specific to reporting coverage
under government-sponsored programs.
f. Other Arrangements Designated as
Minimum Essential Coverage
Section 5000A(f)(1)(E) provides that
the Secretary of Health and Human
Services (HHS), in coordination with
the Secretary of the Treasury, may
recognize other health benefits coverage
as minimum essential coverage. On July
1, 2013, HHS published final
regulations designating certain coverage
as minimum essential coverage and
outlining substantive and procedural
requirements that other types of
coverage must fulfill to be recognized as
minimum essential coverage. Patient
Protection and Affordable Care Act:
Exchange Functions: Eligibility for
Exemptions; Miscellaneous Minimum
Essential Coverage Provisions, 78 FR
39494 (HHS MEC regulations). These
regulations designate as minimum
essential coverage (1) self-funded
student health coverage for plan or
policy years beginning on or before
December 31, 2014, (2) Refugee Medical
Assistance supported by the
Administration for Children and
Families, (3) Medicare Advantage plans,
and (4) State high risk pools for plan or
policy years beginning on or before
December 31, 2014.
The proposed rule that designates the
government department or agency as the
reporting entity for coverage under a
government-sponsored program
provided through a health insurance
issuer applies to Medicare Advantage
plans. Comments are requested on
appropriate rules for identifying the
reporting entity for other arrangements
recognized as minimum essential
coverage under section 5000A(f)(1)(E).
2. Information Required To Be Reported
a. In General
The proposed regulations provide that
the section 6055 information return
must include the name of each
individual enrolled in minimum
essential coverage and the name and
address of the primary insured or other
related person (for example, a parent or
spouse) who submits the application for
coverage (the responsible individual).
The proposed regulations use the term
responsible individual rather than the

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term primary insured because minimum
essential coverage may not be insured
coverage (for example, health coverage
provided by the Department of Veterans
Affairs). The return also must report the
TIN and months of coverage for each
individual who is covered under the
policy or program and other information
specified in forms, instructions, or
published guidance, see §§ 601.601(d)
and 601.602. For employer-provided
coverage, the proposed regulations
require reporting the name, address, and
EIN of the employer maintaining the
plan and whether coverage was enrolled
in through the SHOP.
As part of the effort to minimize the
cost and administrative steps associated
with the reporting requirements, the
proposed regulations do not require
reporting information that would not be
needed by individual taxpayers or the
IRS for purposes of administering the
individual shared responsibility
provisions or the credit for small
employers. Accordingly, the proposed
regulations do not require reporting the
portion of the premium paid by an
employer, which the IRS does not need
to determine if an individual is covered
by minimum essential coverage. The
proposed regulations require reporting
the months of coverage rather than the
specific dates of coverage, because
minimum essential coverage applies
month by month. The proposed
regulations do not require reporting the
amount of any cost-sharing reductions,
which are not administered by the IRS.
Finally, the proposed regulations do not
require reporting the amount of advance
payments or on coverage in a qualified
health plan in the individual market
enrolled in through an Exchange, since
in both cases this information is
reported to the IRS and provided to
individuals by the Exchanges under
section 36B(f)(3).
b. Identifying Information
Health insurance issuers and
employers with self-funded plans
expressed concern that they do not
typically collect TINs from dependents
covered under their policies and that
they may have difficulty obtaining TINs
for some covered individuals. Other
commenters suggested allowing
alternative means of identifying
individuals, such as unique enrollee
identification numbers similar to the
method used by the Massachusetts
Health Connector (the State-based
exchange), or allowing reporting
without TINs for individuals who enroll
in coverage but decline to provide a
TIN. Some commenters suggested
simplifying reporting requirements for
dependents or providing alternatives in

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reporting TINs for new beneficiaries and
others who may not provide TINs at the
time of enrollment.
The proposed regulations adopt TIN
reporting, consistent with the statute.
Section 6055 reporting allows
individuals to confirm their coverage
and the IRS to verify that coverage
without the need to contact the
individuals. The use of TINs to crosscheck individuals against coverage
months is the most efficient way for
individuals and the IRS to avoid the
need for follow-up. Accordingly,
covered individuals have an interest in
providing TINs to reporting entities.
Federal tax records for individuals for
all purposes are maintained by TIN and
individual taxpayers identify
themselves on their returns by TIN.
Establishing another method of
identifying individuals for sections
5000A and 6055 purposes would
require the IRS to create, and taxpayers
to adapt to, an entire parallel
identification system solely for this
purpose.
While section 6055 and the proposed
regulations require TINs for
administering section 5000A, reporting
entities that make reasonable efforts to
collect TINs but do not receive them
will not be subject to penalties under
sections 6721 and 6722 for failure to
timely and accurately report. In
particular, section 6055 reporting is
governed by the same procedures,
limitations, and protections as other
information reporting that requires
obtaining and reporting TINs. Section
6724 and the regulations under that
section waive penalties on reporting
entities for a reasonable failure to
include correct TIN information on a
return or statement, including those
required under section 6055. Penalties
are waived if the reporting entity
demonstrates that it acted in a
responsible manner both before and
after the failure occurred, and that the
failure was due to significant mitigating
factors or events beyond the reporting
entity’s control. In general, a reporting
entity acts responsibly in attempting to
solicit a TIN if after an initial,
unsuccessful request for a TIN (for
example, at the time of enrollment), the
reporting entity makes two consecutive
annual TIN solicitations. No section
6724 penalty is imposed unless the
reporting entity fails to make the two
additional solicitations. Accordingly,
section 6055 reporting entities will not
be unduly penalized for failing to report
a TIN.
As a backstop to reporting a TIN, the
proposed regulations allow reporting
entities to report date of birth if a TIN
is not available. This alternative should

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not be used, however, unless the
reporting entity has made reasonable
efforts to obtain the information by
requesting that a covered individual
provide the TIN.
A commenter requested that the
proposed regulations provide rules
authorizing reporting entities to request
TINs. This authority exists under
section 6109(a)(2) and § 301.6109–
1(b)(1) of the Procedure and
Administration Regulations, which
require individuals to furnish TINs to
persons that must file information
returns.
A commenter noted that issuers and
employers may have difficulty obtaining
overseas addresses for individuals living
abroad. The proposed regulations
provide that only the last known
address for the responsible individual
must be reported.
c. Coverage Dates
For purposes of section 5000A, an
individual who has coverage on any day
in a month is treated as having
minimum essential coverage for the
entire month. See proposed § 1.5000A–
1(b) (78 FR 7314). As a result, the
specific coverage dates are not necessary
for administering and complying with
rules relating to minimum essential
coverage. Accordingly, the proposed
regulations do not require reporting of
the specific dates of coverage. Instead,
the proposed regulations generally
require reporting of the months during
which an individual is treated as having
minimum essential coverage.
A commenter noted that coverage
dates may be inaccurate because
coverage may be terminated or
reinstated after the reporting date for
periods occurring before the reporting
date. Under section 6724 and the
regulations under that section, the IRS
may waive penalties if there is
reasonable cause for the failure to
correct an information return for
retroactive terminations or
reinstatements that are determined after
the calendar year in which coverage was
terminated or reinstated.
A commenter recommended
permitting separate returns or creating
special forms to report coverage for
individuals who change their coverage
during the year to a different health plan
with the same issuer. Although the
proposed regulations do not adopt a rule
addressing this situation, additional
procedures that are responsive to this
comment may be provided in IRS forms
and instructions, see § 601.602.
A commenter noted that employers
face challenges in determining coverage
dates for employees and dependents,
including seasonal and temporary

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workers whose term of employment
changes during the year. The
commenter recommended that the rules
allow reporting an individual’s
enrollment in minimum essential
coverage as of a fixed date each year to
accommodate an employer’s
administrative, payroll, and
recordkeeping procedures. The
individual responsibility payment
under section 5000A applies to
individuals on a monthly basis, so
reporting based on one day during the
year would not be sufficient.
Additionally, varying reporting dates
would be difficult to administer and
would produce information less useful
to taxpayers, who generally file their tax
returns and must determine their
coverage based on a calendar year.
Accordingly, the proposed regulations
do not adopt this suggestion. Comments
are welcome on potential alternative
ways to address the challenges
associated with determining coverage
dates when employment changes.
d. Supplemental Coverage
Arrangements
A commenter asked whether an
employer and an issuer must coordinate
section 6055 reporting for an employersponsored group health plan that
consists of an insured high-deductible
health plan (HDHP) and additional
health benefits provided through a
contribution to a health savings account.
Health savings accounts are not
minimum essential coverage, and
therefore section 6055 reporting is not
required for them. Additionally, the
proposed regulations provide that
reporting is not required for
arrangements such as health
reimbursement arrangements that
supplement minimum essential
coverage.
3. Time and Manner of Filing
a. Form of Return
The proposed regulations provide that
the return under section 6055 may be
made on Form 1095–B or another form
the IRS designates, or on a substitute
form. A substitute form must comply
with revenue procedures or other
published guidance, see § 601.601(d)(2),
that apply to substitute forms. The
proposed regulations require that
information returns be submitted to the
IRS with a transmittal form, Form 1094–
B. In accordance with usual procedure,
these forms will be made available in
draft form at a later date.
b. Time for Filing Returns
The proposed regulations provide for
reporting entities to file the return and

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transmittal form on or before February
28 (or March 31 if filed electronically)
of the year following the calendar year
in which they provided minimum
essential coverage. Commenters
suggested that the proposed regulations
provide different reporting deadlines for
fiscal year health plans to avoid
calendar year reporting of data from
multiple plan years. Since most
individuals file calendar year returns,
permitting fiscal year reporting would
interfere with return preparation and
processing for individuals potentially
subject to the section 5000A individual
shared responsibility payment.
Therefore, the proposed regulations do
not adopt this comment.

tkelley on DSK3SPTVN1PROD with PROPOSALS

c. Electronic Reporting
Commenters recommended
permitting electronic reporting under
section 6055. Section 6011(e) and
§ 301.6011–2 require high-volume filers
(those who file 250 or more returns
during the calendar year) to file
electronically. The proposed regulations
provide that these electronic filing
requirements apply to information
returns under section 6055, but do not
limit electronic filing to high-volume
filers. Accordingly, any reporting entity
may file electronically under section
6055.
4. Combined Reporting
As discussed earlier in this preamble,
applicable large employers that provide
minimum essential coverage on a selfinsured basis are subject to the reporting
requirements of sections 6055 and 6056,
as well as the requirement under section
6051 to file Form W–2, Wage and Tax
Statement, showing wages paid to
employees and taxes withheld. Notices
2012–32 and 2012–33 requested
comments on how to minimize
duplication in reporting under these
provisions.
Several commenters recommended
that the regulations allow combined
information reporting under sections
6055 and 6056 for applicable large
employers that sponsor self-insured
group health plans and must report
under both sections. Other commenters
recommended that employers be
permitted to use a single information
return to report under sections 6051 and
6055, for example by adding the
information required under section 6055
to Form W–2.
As discussed elsewhere in this
preamble, these proposed regulations
seek to simplify reporting and reduce
duplication through a number of
approaches. In particular, the proposed
regulations provide that issuers need
not report under section 6055 for

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individual market qualified health plans
enrolled in through an Exchange. The
proposed regulations also provide relief
from the requirement to report several
items of information that are
unnecessary for tax administration or
are available from other reporting, and
they allow the use of substitute forms
and statements to individuals, which,
under future guidance, may include
furnishing a single substitute statement
to covered individuals for both sections
6055 and 6056.
Accordingly, while the rules for
section 6055 reporting in the proposed
regulations do not assume full
combined reporting under sections
6055, 6056 and 6051, they reflect other
means of avoiding duplication and
simplifying reporting. We continue to
seek comments on other ways to
streamline the reporting methods that
would be permissible under the statute.
5. Statements Furnished to Individuals
The proposed regulations provide that
a reporting entity must furnish a
statement to the covered individual
providing 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. The
proposed regulations permit substitute
statements that 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. See § 601.601(d)(2) of this
chapter. A substitute statement that
includes the information required by
both sections 6055 and 6056 in a single
statement may be permitted by future
guidance.
Commenters recommended
permitting electronic delivery of
statements to individuals. A commenter
suggested that the regulations provide
rules for electronic delivery 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. The commenter suggested that
these reporting regulations permit the
furnishing of one electronic statement
per home address rather than multiple
statements per household. Another
commenter requested guidance on
procedures when an email notice is
returned due to an incorrect address.
The proposed regulations permit
electronic delivery of statements to
individuals if the recipient consents. In
response to concerns about the need to
furnish a statement to each individual,
the proposed regulations also permit
furnishing only one statement per
address. Comments are requested on

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54991

whether and under what circumstances
the regulations should direct reporting
entities to provide a statement to
another individual (who may, for
example, need the statement to
determine his or her tax liability).
Commenters expressed concern about
protecting the privacy of individuals
who provide TINs and about disclosure
of the TINs to other parties. The
regulations provide that section 6055
information reporting will be included
in the IRS truncated TIN program.
Accordingly, to protect the privacy of
covered individuals, statements
furnished to individuals under section
6055 are not required to disclose their
complete TINs.
A commenter recommended that the
statement to individuals should explain
minimum essential coverage and advise
taxpayers that they may be subject to a
penalty for months in which they do not
have minimum essential coverage. The
proposed regulations do not include
rules addressing educational content in
the statement. However, information on
the section 5000A individual shared
responsibility payment may be included
in IRS forms, instructions, and
publications.
6. Penalties
Commenters recommended providing
procedures for correcting errors in
reporting and a safe harbor from
penalties for an issuer that fails to report
information that another entity fails to
provide to the issuer. The proposed
regulations provide that the provisions
of section 6724(a) providing relief for a
failure due to reasonable cause apply to
reporting under section 6055. Because
the procedures described in § 301.6721–
1(b), which provide for reduced
penalties for reporting errors that are
timely corrected, will apply to
corrections of errors in reporting under
section 6055 that are not due to
reasonable cause, the proposed
regulations do not prescribe separate
rules for correcting errors.
Proposed Effective/Applicability Date
These regulations are proposed to
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,
which would have resulted in reporting
in 2015 and furnishing statements to
covered individuals in 2015.
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 in 2016 with respect to

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Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Proposed Rules

2015. Taxpayers are encouraged,
however, to voluntarily comply with
section 6055 information reporting for
minimum essential coverage provided
in 2014 by applying these regulations
once finalized.

tkelley on DSK3SPTVN1PROD with PROPOSALS

Special Analyses
It has been determined that this notice
of proposed rulemaking is 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.
It is hereby certified that these
regulations will not have a significant
economic impact on a substantial
number of small entities. This
certification is based on the fact that the
information collection required under
these regulations is imposed under
section 6055. Consistent with the
statute, the proposed regulations require
a person that provides minimum
essential coverage to an individual to
file a return with the IRS reporting
certain information and to furnish a
statement to the responsible individual
who enrolled an individual or family in
the coverage. These regulations
primarily provide the method of filing
and furnishing returns and statements
under section 6055. Moreover, the
proposed regulations attempt to
minimize the burden associated with
this collection of information by
limiting reporting to the information
that the IRS will use to verify minimum
essential coverage and administer tax
credits.
Based on these facts, a Regulatory
Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) is not required.
Pursuant to section 7805(f) of the
Code, this notice of proposed
rulemaking has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
comments that are submitted timely to
the IRS as prescribed in this preamble
under the ADDRESSES heading. The IRS
and Treasury Department request
comments on all aspects of the proposed
rules. All comments will be available at
www.regulations.gov or upon request.
A public hearing has been scheduled
for November 19, 2013, at 10 a.m., in the

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auditorium, Internal Revenue Building,
1111 Constitution Avenue NW.,
Washington, DC. Due to building
security procedures, visitors must enter
at the Constitution Avenue entrance. All
visitors must present photo
identification to enter the building.
Because of access restrictions, visitors
will not be admitted beyond the
immediate entrance more than 30
minutes before the hearing starts. For
information about having your name
placed on the building access list to
attend the hearing, see the FOR FURTHER
INFORMATION CONTACT section of this
preamble.
The rules of 26 CFR 601.601(a)(3)
apply to the hearing. Persons who wish
to present oral comments at the hearing
must submit written or electronic
comments by November 8, 2013, an
outline of topics to be discussed and the
time to be devoted to each topic by
(signed original and eight (8) copies by
November 8, 2013. A period of 10
minutes will be allotted to each person
for making comments.
An agenda showing the scheduling of
the speakers will be prepared after the
deadline for receiving outlines has
passed. Copies of the agenda will be
available free of charge at the hearing.
Drafting Information
The principal authors of these
proposed regulations are Andrew
Braden and Frank W. Dunham III 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.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 301
are proposed to be amended as follows:
PART 1—INCOME TAXES
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.

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Par. 2. Sections 1.6055–1 and 1.6055–
2 are added to read as follows:

■

§ 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 a transmittal 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)).
(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. 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 in minimum essential
coverage.
(12) Taxpayer identifying number.
The term taxpayer identifying number

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Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Proposed Rules
(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 governmentsponsored 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)), including each participating
employer with respect to a self-insured
group health plan or arrangement
established or maintained by more than
one employer (other than 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 selfinsured 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)(1)(A) through
(c)(2)(1)(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.

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(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. 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 governmentsponsored 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 governmentsponsored program through a health
insurance issuer (such as Medicaid,
CHIP, or Medicare) 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
7000.14–R, Department of Defense
Financial Management Regulations) that
must file the returns and furnish the
statements required by this section for

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54993

the Nonappropriated Fund Health
Benefits Program.
(4) Other arrangements recognized as
minimum essential coverage. The
Commissioner may designate in
published guidance, see § 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) 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) Name, address, and employer
identification number (EIN) for the
person required to file the return;
(ii) Name, address, and TIN, or date
of birth if a TIN is not available, of the
responsible individual;
(iii) Name and TIN, or date of birth if
a TIN is not available, of each
individual 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 §§ 601.601(d) and 601.602
of this chapter.
(2) Information relating to employerprovided coverage. In addition to the
information described in paragraph
(d)(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) 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 §§ 601.601(d) and 601.602
of this chapter.
(e) 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
information return is required to report
arrangements that provide benefits in
addition or as a supplement to a health
plan or arrangement that constitutes
minimum essential coverage.

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Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Proposed Rules

(3) Individuals not enrolled in
coverage. No reporting is required under
this section for coverage offered to
individuals who do not enroll.
(f) Time and place 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
at the address specified on the return
form or in its instructions.
(2) Extensions of time. See § 1.6081–
8 for rules relating to extensions of time
to file.
(3) Electronic filing. See § 301.6011–8
of this chapter for rules relating to
electronic filing.
(4) Form of return. A return required
under this paragraph (f) may be made on
Form 1095–B or other form designated
by the Internal Revenue Service or on a
substitute form. A substitute form must
comply with revenue procedures or
other published guidance (see
§ 601.601(d)(2) of this chapter) that
apply to substitute forms.
(g) Statements to be furnished to
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 showing—
(i) Contact phone number for the
person required to file the return and
policy number, if applicable; and
(ii) Information described in
paragraph (d) of this section for the
reporting entity and each 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 identified in the
return a copy of the return filed with the
IRS or on a substitute statement. A
substitute statement must include the
information required to be shown on the
return filed with the IRS, and must
comply with requirements in published
guidance (see § 601.601(d)(2) of this
chapter) relating to substitute
statements. An IRS truncated taxpayer
identifying number may be used as the
identifying number for an individual in
lieu of the identifying number appearing
on the corresponding information return
filed with the IRS.

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(4) Time and manner for furnishing
statements. 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. If mailed, the
statement must be sent to the
individual’s last known permanent
address or, if no permanent address is
known, to the individual’s temporary
address. A reporting entity may furnish
the statement electronically in
accordance with § 1.6055–2.
(h) Penalties—(1) Failure to file
correct returns. The section 6721
penalty may apply to a person that fails
to file information returns required by
this section on or before the required
filing date, fails to include all of the
required information on the return, or
includes incorrect information on the
return. See section 6724 and the
regulations under that section for rules
relating to waivers of penalties for
certain failures due to reasonable cause.
(2) Failure to furnish correct
information statements. The section
6722 penalty may apply to a reporting
entity that fails to furnish statements
required by this section on or before the
prescribed date, fails to include all the
required information on the statement,
or includes incorrect information on the
statement. See section 6724 and the
regulations under that section for rules
relating to waivers of penalties for
certain failures due to reasonable cause.
(i) 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
with respect to the reporting
requirements for 2014 (for information
returns that would have been required
to be filed and statements that would
have been required to be furnished to
covered individuals in 2015 with
respect to 2014).
§ 1.6055–2 Electronic furnishing of
statements reporting minimum essential
coverage.

(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

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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
furnisher may provide in the disclosure
furnished pursuant to paragraph
(a)(3)(v) of this section 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. A furnisher may treat a request for
a paper statement as a withdrawal of
consent. If the furnisher provides a
statement after the withdrawal of
consent takes effect, the recipient has
not consented to receive the statement
in electronic format.
(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 a
new consent or confirmation of consent
to receive the statement electronically
from the recipient.
(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 required under section 6055
electronically. The email attachment uses the
same electronic format that F will use for the

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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 statements
electronically. 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 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.

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(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
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 § 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. The
furnisher must furnish a corrected
statement to the recipient electronically
if the original statement was furnished
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

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54995

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 that would have
been required to be furnished to covered
individuals in 2015 with respect to
2014).
■ Par. 3. Section 1.6081–8 is amended
by adding the language ‘‘1095 series’’
between the words ‘‘1042–S,’’ and
‘‘1098’’ in paragraph (a).
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 4. The authority citation for part
301 continues to read in part as follows:

■

Authority: 26 U.S.C. 7805 * * *

Par. 5. Section 301.6011–8 is added to
read as follows:

■

§ 301.6011–8 Required use of magnetic
media to report minimum essential
coverage.

(a) Returns reporting minimum
essential coverage must be filed on
magnetic media. A person required to
file an information return reporting
minimum essential coverage under

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§ 1.6055–1 of this chapter must file the
return on magnetic media if the person
is required to file to least 250 returns
during the calendar year. Returns filed
on magnetic media must be made in
accordance with applicable
publications, forms, instructions, or
published guidance, see §§ 601.601(d)
and 601.602 of this chapter.
(b) Magnetic media. For purposes of
this section, the term magnetic media
has the same meaning as in § 301.6011–
2(a)(1).
(c) Determination of 250 returns. For
purposes of this section, a person is
required to file at least 250 returns if,
during the calendar year, the person is
required to file at least 250 returns of
any type, including information returns
(for example, Forms W–2, Forms 1099),
income tax returns, employment tax
returns, and excise tax returns.
(d) Waiver. The Commissioner may
waive the requirements of this section
in cases of hardship in accordance with
§ 301.6011–2(c)(2)(i).
(e) Failure to file. If a person fails to
file an information return on magnetic
media when required by this section,
the person is deemed to have failed to
file the return. See section 6721 for
penalties for failure to file returns and
see section 6724 and the regulations
under section 6721 for failure to file on
magnetic media.
(f) Effective/applicability date. This
section applies to returns on Form
1095–B or another form the IRS
designates required to be filed after
December 31, 2015. Reporting entities
will not be subject to penalties under
section 6721 with respect to the
reporting requirements for 2014 (for
information returns that would have
been required to be filed in 2015 with
respect to 2014).
■ Par 6. Section 301.6721–1 is amended
by removing the word ‘‘or’’ after
paragraph (g)(3)(xxii), removing the
period and adding a semi-colon in its
place after paragraph (g)(3)(xxiii), and
adding paragraphs (g)(3)(xxiv) and
(g)(3)(xxv) to read as follows:
§ 301.6721–1 Failure to file correct
information returns.

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*

*
*
*
*
(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).
*
*
*
*
*
■ Par 7. Section 301.6722–1 is amended
by removing the word ‘‘or’’ after

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paragraph (d)(2)(xxxi), removing the
period and adding a semi-colon in its
place after paragraph (d)(2)(xxxii), and
adding paragraphs (d)(2)(xxxiii) and
(d)(2)(xxxiv) to read as follows:
§ 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).
*
*
*
*
*
Heather C. Maloy,
Acting Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2013–21783 Filed 9–5–13; 4:15 pm]
BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301
[REG–136630–12]
RIN 1545–BL26

Information Reporting by Applicable
Large Employers on Health Insurance
Coverage Offered Under EmployerSponsored Plans
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:

This document contains
proposed regulations providing
guidance to employers that are subject
to the information reporting
requirements under section 6056 of the
Internal Revenue Code (Code), enacted
by the Affordable Care Act. Section
6056 requires those employers to report
to the IRS information about their
compliance with the employer shared
responsibility provisions of section
4980H of the Code and about the health
care coverage they have offered
employees. Section 6056 also requires
those employers to furnish related
statements to employees so that
employees may use the statements to
help determine whether, for each month
of the calendar year, they can claim on
their tax returns a premium tax credit
under section 36B of the Code (premium
tax credit). In addition, that information
will be used to administer and ensure
compliance with the eligibility

SUMMARY:

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requirements for the employer shared
responsibility provisions and the
premium tax credit. The proposed
regulations affect applicable large
employers (generally meaning
employers with 50 or more full-time
employees, including full-time
equivalent employees, in the prior year),
employees and other individuals.
This document also provides notice of
a public hearing on these proposed
rules.
DATES: Written or electronic comments
must be received by November 8, 2013.
Requests to speak and outlines of topics
to be discussed at the public hearing
scheduled for November 18, 2013, at 10
a.m., must be received by November 8,
2013.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–136630–12), Room
5205, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–136630–12),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically,
via the Federal eRulemaking Portal at
www.regulations.gov (IRS REG–136630–
12). The public hearing will be held in
the Auditorium, Internal Revenue
Building, 1111 Constitution Avenue
NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Ligeia Donis (202) 927–9639;
concerning submission of comments,
the hearing, and/or to be placed on the
building access list to attend the
hearing, please contact Oluwafunmilayo
(Funmi) Taylor at (202) 622–7180 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information
contained in this notice of proposed
rulemaking has been submitted to the
Office of Management and Budget for
review in accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the
collection of information should be sent
to the Office of Management and
Budget, Attn: Desk Officer for the
Department of the Treasury, Office of
Information and Regulatory Affairs,
Washington, DC 20503, with copies to
the Internal Revenue Service, Attn: IRS
Reports Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224. Comments on the collection of
information should be received by
November 8, 2013. Comments are
specifically requested concerning:

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