Td 9660

13220

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

the plug expands to fill the biopsy void
and remains in place until resorbed.
(b) Classification. Class II (special
controls). The special controls for this
device are:
(1) The design characteristics of the
device must ensure that the geometry
and material composition are consistent
with the intended use.
(2) Performance testing must
demonstrate deployment as indicated in
the accompanying labeling, including
the indicated introducer needles, and
demonstrate expansion and resorption
characteristics in a clinically relevant
environment.
(3) In vivo evaluation must
demonstrate performance characteristics
of the device, including the ability of
the plug to not prematurely resorb or
migrate and the rate of pneumothorax.
(4) Sterility testing must demonstrate
the sterility of the device and the effects
of the sterilization process on the
physical characteristics of the plug.
(5) Shelf-life testing must demonstrate
the shelf-life of the device including the
physical characteristics of the plug.
(6) The device must be demonstrated
to be biocompatible.
(7) Labeling must include a detailed
summary of the device-related and
procedure-related complications
pertinent to the use of the device and
appropriate warnings. Labeling must
include identification of compatible
introducer needles.
Dated: February 28, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014–05061 Filed 3–7–14; 8:45 am]
BILLING CODE 4160–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 301, and 602
[TD 9660]
RIN 1545–BL31

Information Reporting of Minimum
Essential Coverage
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
pmangrum on DSK3VPTVN1PROD with RULES

AGENCY:

This document contains final
regulations providing 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 Patient
Protection and Affordable Care Act.

SUMMARY:

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

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 the information
in statements to covered individuals.
These final regulations affect health
insurance issuers and carriers,
employers, governments, and other
persons that provide minimum essential
coverage to individuals.
DATES: Effective Date: These regulations
are effective on March 10, 2014.
Applicability Dates: For dates of
applicability, see §§ 1.6055–1(j) and
1.6055–2(b).
FOR FURTHER INFORMATION CONTACT:
Andrew Braden, (202) 317–4718 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information
contained in these regulations has been
reviewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)) under control
number 1545–2252.
The collection of information in these
final 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 sections 5000A
and 6055 of the Code. The likely
respondents are health insurance issuers
and carriers, self-insured employers or
other sponsors of self-insured group
health plans, and governments that
provide minimum essential coverage.
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.
The burden for the collection of
information contained in these final
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 final
regulations.
Books or records relating to a
collection of information must be
retained as long as their contents may
become material in the administration
of any internal revenue law. Generally,
tax returns and return information are
confidential, as required by section
6103.

PO 00000

Frm 00032

Fmt 4700

Sfmt 4700

Background
This document contains final
regulations that amend the Income Tax
Regulations (26 CFR part 1) under
sections 6055 and 6081 and the
Procedure and Administration
Regulations (26 CFR part 301) under
sections 6011, 6721, and 6722, relating
to the requirement for providers of
minimum essential coverage (as defined
in section 5000A(f)) to report to the IRS
certain information about individuals
covered by minimum essential coverage
and to provide a statement to the
individuals. Section 6055 was enacted
by section 1502 of the Patient Protection
and Affordable Care Act, Public Law
111–148 (124 Stat. 119 (2010)), which
together with the Health Care and
Education Reconciliation Act of 2010,
Public Law 111–152 (124 Stat. 1029
(2010)), is referred to as the Affordable
Care Act.
On September 9, 2013, a notice of
proposed rulemaking (REG–132455–11)
was published in the Federal Register
(78 FR 54986). Written comments
responding to the proposed regulations
were received. A public hearing was
held on November 19, 2013. The
comments are available for public
inspection at www.regulations.gov or on
request. After consideration of all the
comments, the proposed regulations are
adopted as amended by this Treasury
decision. These final regulations also
include certain nonsubstantive revisions
to increase consistency with final
regulations issued under section 6056
(TD 9661) contemporaneously with
these regulations
Explanation of Provisions and
Summary of Comments
1. Coverage Subject To Reporting
a. Minimum Essential Coverage
The proposed regulations provided
that 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
IRS. Minimum essential coverage is
defined in section 5000A(f) and
regulations issued under that section.
Commenters suggested that section
6055 reporting should not be required
for an individual who may be exempt
from the individual shared
responsibility payment under section
5000A.
Providers of minimum essential
coverage, including employers
providing coverage under a self-insured
group health plan, may not have the
information necessary to determine an
individual’s exempt status under

E:\FR\FM\10MRR1.SGM

10MRR1

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations
section 5000A. To ensure complete and
accurate reporting, the final regulations
provide for section 6055 reporting for all
covered individuals.

pmangrum on DSK3VPTVN1PROD with RULES

b. Supplemental Coverage
Arrangements
The proposed regulations provided
that reporting is not required for
arrangements that provide benefits in
addition or as a supplement to a health
plan or arrangement that constitutes
minimum essential coverage. The
preamble to the proposed regulations
identified health reimbursement
arrangements as supplemental coverage
to which this rule may apply. In
addition, reporting is not required for
coverage that is not minimum essential
coverage. The preamble to the proposed
regulations noted that no reporting is
required for health savings accounts,
which are not minimum essential
coverage.
A commenter asked whether on-site
medical clinics are supplemental
benefits for which no reporting is
required under this rule. Another
commenter asked whether reporting is
required for an individual who is
covered by Medicare Part B but not
Medicare Part A.
Under section 9832(c)(1)(G), coverage
at on-site medical clinics are excepted
benefits. Section 5000A(f)(3) provides
that excepted benefits are not minimum
essential coverage. Under section
5000A(f)(1)(A)(i), Medicare Part A but
not Medicare Part B is minimum
essential coverage. Accordingly, section
6055 reporting is not required for
coverage at on-site medical clinics or for
Medicare Part B.
Commenters asked whether the
supplemental coverage rule applies to
wellness programs or to self-insured
employer-provided retiree coverage that
supplements Medicare benefits.
Wellness programs that are an element
of other minimum essential coverage
(such as wellness programs offering
reduced premiums or cost-sharing
under a group health plan) do not
require separate section 6055 reporting.
The final regulations clarify that
minimum essential coverage that
supplements a primary plan of the same
plan sponsor or that supplements
government-sponsored coverage (such
as Medicare) are supplemental coverage
not subject to reporting.
2. Persons Required To Report
a. Self-Insured Group Health Plans
i. Controlled Groups
The proposed regulations provided
that the plan sponsor is responsible for
reporting under section 6055 for a self-

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

insured group health plan and
identified the sponsor and reporting
entity for various types of self-insured
arrangements. In general, the plan
sponsor is the entity that establishes or
maintains the plan. The proposed
regulations provided that the employer
is the plan sponsor for self-insured
group health plans established or
maintained by a single employer and
that each participating employer is the
plan sponsor for a plan established or
maintained by more than one employer
other than a multiple employer welfare
arrangement. The proposed regulations
also provided that, for purposes of
identifying the employer, the section
414 employer aggregation rules do not
apply. Thus, under the proposed
regulations, a self-insured group health
plan or arrangement covering employees
of employers in a controlled group was
treated as sponsored by more than one
employer and each employer was
required to report for its employees.
Commenters requested that the final
regulations allow, but not require, one
entity in a controlled group to report
under section 6055 for all members of
the group. A commenter noted that only
one entity within the group may
maintain the plan. Other commenters
noted that in some controlled groups
each entity may keep its own records
but other groups may not track the
entity to which an employee belongs.
Most employers that sponsor selfinsured group health plans are
applicable large employer members
required to report under both section
6056 and section 6055. As discussed
later in this preamble, the final
regulations provide that applicable large
employer members that are plan
sponsors of self-insured group health
plans will file a single information
return that combines reporting under
sections 6055 and 6056. These entities
apply the rules under section 6056 for
identifying the reporting entities in a
controlled group. As stated in the
preamble to the proposed regulations,
one member of a controlled group may
assist the other members by filing
returns and furnishing statements on
behalf of all members, thus providing
administrative flexibility. However,
each employer is treated as a plan
sponsor separately liable for timely and
correct reporting. Employers in
controlled groups that are not applicable
large employer members (determined
after applying the aggregation rules
under § 54.4980H–1(a)(16)), and
reporting entities (such as issuers) that
are not reporting as employers, may
report under section 6055 as separate
entities, or one entity may report for the
group.

PO 00000

Frm 00033

Fmt 4700

Sfmt 4700

13221

ii. Statutory Employees
A commenter asked that the final
regulations clarify that a company may
report self-insured group health plan
coverage provided to statutory
employees, that is, individuals who are
not common law employees but are
treated as employees under the Code for
some purposes. The commenter noted
that the employer shared responsibility
payment under section 4980H and
related information reporting under
section 6056 apply to common law and
not statutory employees.
Under section 6055, the provider of
minimum essential coverage must
report for covered individuals. In many
cases, the provider is not the employer
of the covered individuals. The
proposed and final regulations provide
that that the plan sponsor of a selfinsured group health plan reports under
section 6055. Accordingly, the plan
sponsor reports under section 6055 for
individuals covered by the plan,
whether or not the individuals are
employees.
b. Small Business Health Options
Program (SHOP)
In order to reduce the compliance
burden on health insurance issuers, the
proposed regulations provided that
issuers are not required to report under
section 6055 on qualified health plans
enrolled in through Affordable
Insurance Exchanges (Exchanges), also
called Marketplaces. Commenters
requested that Exchanges also be
responsible for section 6055 reporting
for coverage obtained through the
SHOP.
The final regulations do not require
health insurance issuers to report under
section 6055 for coverage under
individual market qualified health plans
purchased through an Exchange because
Exchanges must report on this coverage
under section 36B(f)(3). Exchanges are
not required, however, to report on
coverage obtained through the SHOP,
therefore issuer reporting of SHOP
coverage under section 6055 is
necessary.
c. Government Employers
Pursuant to section 6055(d), the
proposed regulations provided that, in
general, 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,
designating the other governmental unit,
agency, or instrumentality as the person
responsible for section 6055 reporting.
The proposed regulations reserved the
definition of agency or instrumentality.

E:\FR\FM\10MRR1.SGM

10MRR1

13222

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

Under the proposed regulations, a
government employer included an
Indian tribal government (as defined in
section 7701(a)(40)) or subdivision of an
Indian tribal government (as defined in
section 7871(d)). A commenter asked
whether a wholly-owned tribal entity
formed under tribal and federal law is
an agency or instrumentality of a
governmental unit. The commenter
suggested that it is administratively
burdensome for an Indian tribal
government (ITG) to determine whether
a particular entity qualifies as an agency
or instrumentality of an ITG under
existing authorities, such as Revenue
Ruling 57–128 (1957–1 CB 311), see
§ 601.601(d), relating to employment
taxes.
The final regulations continue to
reserve on the definition of agency or
instrumentality for purposes of section
6055. Until future guidance is issued
that defines that term for purposes of
section 6055, in determining whether an
entity is an agency or instrumentality of
a governmental unit, the entity may
make that determination based on a
reasonable and good faith interpretation
of existing rules relating to agency or
instrumentality determinations for other
federal tax purposes.
d. Government-Sponsored Programs
The proposed regulations provided
that, in general, a health insurance
issuer must report under section 6055
for all insured coverage. However,
under the proposed regulations the
responsible government department or
agency and not the issuer was the
reporting entity for coverage under a
government-sponsored program
provided through a health insurance
issuer (such as some Medicaid,
Children’s Health Insurance Program
(CHIP), and Medicare programs). A
commenter requested that the final
regulations specify that this rule applies
to the Medicare Advantage program.
The final regulations clarify that issuers
do not report coverage under the
Medicare Advantage program.
3. Information Required To Be Reported

pmangrum on DSK3VPTVN1PROD with RULES

a. Information Not Required To Be
Reported
Section 6055 calls for the reporting of
several data elements that are not
required by taxpayers for preparing their
tax returns or by the IRS for tax
administration. As part of the effort to
minimize the cost and simplify the
administrative implementation of
reporting under section 6055, the
proposed regulations did not require
reporting these unnecessary items. For
example, the proposed regulations did

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

not require reporting the amount of
advance payments of the premium tax
credit and cost-sharing reductions or the
amount of the premium for employer
coverage paid by an employer. Several
commenters expressed support for these
simplifications, and the final regulations
retain them.
b. Taxpayer Identification Numbers
(TINs)
i. Requirement To Request TINs
The proposed regulations
implemented the statutory requirement
that the section 6055 information return
include the name and TIN for the
primary insured or other related person
(such as a parent or spouse) who
submits the application for coverage,
which the proposed regulations called
the responsible individual, and for each
covered individual. However, the
proposed regulations permitted
reporting entities to report a date of
birth if a TIN is not available for an
individual.
Some commenters advised that they
do not currently obtain TINs for
individuals enrolled in coverage,
particularly for dependents, and
asserted that the requirement to obtain
TINs is burdensome and unnecessary.
Commenters suggested that individuals
will be reluctant to provide TINs and
that no enforcement mechanism such as
backup withholding is available. Some
commenters expressed concerns about
the risk of misuse of TINs and violations
of privacy. Commenters requested, in
general, that the final regulations allow
reporting entities to report only a date
of birth in lieu of a TIN for all
individuals, or alternatively to provide
a TIN only for an employee or other
responsible individual and dates of
birth for other covered individuals.
Other commenters suggested that TIN
reporting should be limited to the
reporting under section 111 of the
Medicaid, Medicare, and SCHIP
Extension Act of 2007 (PL 110–173, 121
Stat. 2492), which requires TIN
reporting only for individuals age 45 to
64 with coverage based on employment
status.
After consideration of the comments,
the final regulations retain the rule in
the proposed regulations directing
reporting entities to provide TINs for all
covered individuals and to provide a
date of birth only if a TIN is not
available after the reporting entity
makes reasonable efforts to obtain it.
The purpose of information reporting
under section 6055 is for individuals to
establish, and the IRS to confirm, that
the individuals have minimum essential
coverage and are not subject to the

PO 00000

Frm 00034

Fmt 4700

Sfmt 4700

section 5000A individual responsibility
payment. The information on Form
1040 identifying dependents that can be
matched with section 6055 reporting is
name and TIN. Because many
individuals have the same name, the
name and TIN combination enable the
IRS to identify that a particular
individual has minimum essential
coverage.
Individuals have a strong incentive to
provide a TIN to the reporting entity if
one is available to establish that they
have coverage qualifying under section
5000A. Without a TIN to enable the IRS
to match coverage reported on the Form
1040 with coverage reported on a
section 6055 return, individuals will
receive correspondence from the IRS
asking them to verify coverage.
Accordingly, the final regulations allow
section 6055 reporting of dates of birth
in lieu of TINs only if the reporting
entity is informed that an individual has
no TIN or the reporting entity is unable
to obtain a TIN after making reasonable
efforts, as discussed in more detail later
in this preamble. Nothing in these final
regulations authorizes a reporting entity
to terminate coverage if a TIN is not
provided. Reporting a date of birth in
one year does not eliminate the need to
make reasonable efforts to obtain a TIN.
A commenter suggested that requiring
TIN reporting for responsible
individuals not enrolled in the coverage
reported is unnecessary and
inconsistent with the statute, which
requires reporting a TIN for the
‘‘primary insured’’ and each other
covered individual. Under section
6055(b)(1)(B)(iv), the Secretary may
direct the reporting of other
information. Reporting of TINs for
responsible individuals not enrolled in
the coverage is helpful for tax
administration because it facilitates
matching the coverage of individuals
reported under section 6055 with
individuals for whom the responsible
individual claims a personal exemption
deduction. However, in response to the
comment, the final regulations provide
that reporting TINs for responsible
individuals not enrolled in the coverage
is optional.
Commenters requested that the final
regulations include rules on
confidentiality and restricting the use of
private information by issuers and
employers. A commenter suggested that
the final regulations include rules
similar to 45 CFR 155.260 and 45 CFR
155.715, which restrict the use of
confidential information by Exchanges.
The cited regulations under 45 CFR are
issued under the authority of the
Department of Health and Human
Services (HHS) to oversee and regulate

E:\FR\FM\10MRR1.SGM

10MRR1

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

pmangrum on DSK3VPTVN1PROD with RULES

the operation of Exchanges. Because the
IRS and Treasury Department lack
similar regulatory authority over section
6055 reporting entities, the final
regulations do not include rules on
confidentiality. However, existing
privacy rules, such as those issued by
HHS, apply and protect consumers’
information.
To help protect against theft of social
security numbers and other TINs, IRS
rules permit reporting entities required
to furnish certain statements to partially
mask the TIN of statement recipients
and others reported on an information
statement by using a truncated TIN. It is
expected that section 6055 reporting
entities will be able to truncate the TINs
of the responsible individual and
covered individuals under these rules.
The final regulations clarify that
reporting entities are permitted to use
truncated TINs on section 6055
statements.
ii. Reasonable Efforts To Obtain TINs
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) or
failure to furnish a correct payee
statement (section 6722). These
penalties may be waived if the failure
was due to reasonable cause and not
willful neglect (section 6724(a)). The
preamble to the proposed regulations
noted that the section 6721 and 6722
penalties may apply to a section 6055
reporting entity but the penalties may be
waived under section 6724 and the
related regulations for certain failures
due to reasonable cause. The preamble
explained that penalties are waived if a
reporting entity demonstrates that it
acted in a responsible manner and that
the failure is due to significant
mitigating factors or events beyond the
reporting entity’s control. See
§ 301.6724–1(a)(1).
Some commenters were uncertain
about what solicitations are required to
satisfy the requirement to act in a
responsible manner. In general, under
§ 301.6724(e) (regarding missing TINs),
a person will be treated as acting in a
responsible manner if the person
properly solicits the TIN but does not
receive it. Under these rules, the
reporting entity makes an initial
solicitation at the time the relationship
with the payee is established. However,
the reporting entity is not required to
make this initial solicitation if it already
has the payee’s TIN and uses that TIN
for all relationships with the payee. If
the reporting entity does not receive the

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

TIN, the first annual solicitation is
generally required by December 31 of
the year in which the relationship with
the payee begins (January 31 of the
following year if the relationship begins
in December). Generally, if the TIN is
still not provided, a second solicitation
is required by December 31 of the
following year. If a TIN is still not
provided, the reporting entity has acted
in a responsible manner and need not
continue to solicit a TIN.
For example, a reporting entity that
makes an unsuccessful initial
solicitation for a TIN in December 2014
must make a second solicitation by
December 31, 2015. Assuming that
request is also unsuccessful, the
reporting entity would not be penalized
if its section 6055 reporting submitted
in early 2016 reported a date of birth in
place of TIN for the individual in
question. One additional solicitation
must be made by December 31, 2016, to
have acted in a responsible manner.
Commenters pointed out that the
rules for solicitation in the existing
regulations may not adequately address
the circumstances surrounding the
relationship between a reporting entity
and a responsible individual and the
covered individuals. Commenters
requested that the final regulations
provide rules on soliciting TINs specific
to section 6055 reporting. For instance,
a commenter suggested that a reporting
entity should be allowed to certify that
it has made reasonable efforts to obtain
TINs and that the certification should be
reviewed only upon examination, so
that reporting entities do not have to
respond to IRS notices requesting
missing TINs. Commenters also
suggested that the final regulations
require reporting entities to request
information only once or at most twice.
Other commenters asked whether
certain procedures that are not
addressed in the current section 6724
regulations would satisfy the
solicitation requirement, including: (1)
Is a reporting entity required to restart
the solicitation process if a new
individual is added to a policy; (2) does
soliciting information from the
responsible individual serve as
soliciting information from each
covered individual on the section 6055
statement; (3) must reporting entities
solicit information on a Form W–9,
Request for Taxpayer Identification
Number and Certification, or may a
request for information on, for example,
an application for insurance coverage
serve as the first solicitation; (4) may a
reporting entity obtain information from
other documents in its possession; and
(5) may reporting entities solicit
information by email or phone call.

PO 00000

Frm 00035

Fmt 4700

Sfmt 4700

13223

In enacting the Affordable Care Act,
Congress added section 6055 reporting
to the list of reporting provisions to
which the section 6721, 6722, and 6724
penalty provisions apply, indicating
that Congress intended that section 6055
reporting should be subject to the same
rules in this regard as other information
reporting. Regulations and other
authorities under those sections already
provide detailed rules for compliance,
including the rules described above for
waiving any penalties for reasonable
cause that address some of the
commenters questions. For instance,
consistent with the rules in § 301.6724–
1(e)(1)(i), the reporting entity may make
an initial solicitation orally (by phone or
in person), in writing (including using
an application), or by electronic means
such as email. The rules for the manner
of making an annual solicitation should
apply in the case of section 6055 as
well. See, for example, § 301.6724–
1(e)(2).
Under § 301.6724–1(e)(1)(i), an initial
solicitation is not required if the
reporting entity already has the payee’s
TIN and uses that TIN for all
relationships of the payee with the
reporting entity. In the case of section
6055 reporting, a reporting entity would
likewise not be required to make an
initial solicitation if the reporting entity
has the TIN or other documents in its
possession that it uses for other aspects
of its relationship with the covered
individual and/or responsible
individual. For example, if the reporting
entity is also the responsible
individual’s employer, the reporting
entity does not have to make an initial
solicitation for the employee’s TIN for
purposes of section 6055 reporting and
may use the TIN that is used for
employment purposes.
The solicitation rules under section
6724 also address situations in which
the reporting entity does not have TIN
information for account holders.
Accounts commonly are maintained
jointly. In these situations, the
solicitation rules do not require
solicitation of the accountholder merely
because another person is added to the
account. Similarly, although the
addition of a new individual to a policy
would trigger an obligation to obtain a
TIN for the newly added individual, it
would not trigger an obligation to solicit
a TIN from existing covered individuals
(or the responsible person).
Treasury and the IRS recognize that
the existing solicitation rules under
section 6724 may not address certain
circumstances that may arise with
respect to reporting under section 6055.
Although the final regulations do not
revise the regulations under section

E:\FR\FM\10MRR1.SGM

10MRR1

13224

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

6724 to specifically address these
circumstances, Treasury and the IRS
will continue to study the issue and
may provide additional clarification if
appropriate through guidance or forms
and instructions.
c. Employer Identification Numbers
(EINs)
The proposed regulations required
reporting entities to report the name,
address, and EIN of the plan sponsor. A
health insurance issuer also must report
the EIN of an employer maintaining a
plan and whether coverage was enrolled
in through the SHOP.
The proposed regulations provided
that, for a multiemployer group health
plan, the plan sponsor is the
association, committee, joint board of
trustees, or other similar group of
representatives of the parties who
establish or maintain the plan. A
commenter asked that the final
regulations clarify that the plan sponsor
of a multiemployer plan is not required
to report the EIN of the participating
employers. The proposed and final
regulations do not require sponsors of
multiemployer plans to report the EINs
of the participating employers. The
regulations require only health
insurance issuers to report the EIN of
the employer sponsoring an insured
group health plan.
d. Coverage Dates
The proposed regulations provided
that section 6055 information returns
must provide the months for which an
individual is enrolled in and entitled for
at least one day to receive benefits
under the coverage. Several commenters
supported the requirement to report
only the months of coverage, while
others requested that reporting entities
be allowed to report coverage dates
instead of months. Section 6055
reporting of coverage on a monthly basis
simplifies compliance for individual
taxpayers because section 5000A
requires that they demonstrate coverage
under minimum essential coverage for
each month of a taxable year.
Accordingly, the final regulations retain
the rule in the proposed regulations.
4. Time and Manner of Filing

pmangrum on DSK3VPTVN1PROD with RULES

a. Electronic Filing
The proposed regulations provided
that any person who is required to file
under section 6055 must file
electronically if the person is required
to file at least 250 returns of any type.
The proposed regulations aggregated all
returns, including information returns
(for example, Forms W–2 and 1099),
income tax returns, employment tax

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

returns, and excise tax returns, filed for
the calendar year to determine if the
250-return threshold is met. A
commenter requested that the final
regulations require electronic reporting
only if a reporting entity files at least
250 Forms W–2.
A ‘‘no aggregation’’ method of
determining whether the 250 return
threshold is met is consistent with the
application of the rule to other
information returns, such as Forms 1099
and W–2, that apply the 250 return
threshold separately to each type of
return required to be filed. See
§ 301.6011–2(c)(1). The final regulations
adopt this rule. As a result, Forms 1095–
B and 1095–C will be required to be
electronically filed only if the reporting
entity is required to file at least 250 of
the specific form. Like transmittals of
other information returns, the
transmittal (Form 1094–B or 1094–C) is
not treated as a separate return but must
be electronically filed in the form and
manner required by the IRS when the
Form 1095 is electronically filed. The
final regulations amend § 301.6011–2 to
add Forms in the 1094 and 1095 series.
Proposed § 301.6011–8 will be removed
in a separate document.
b. Corrected Returns
The proposed regulations provided
that the section 6721 and section 6722
penalties for failing to timely report
correct information apply to reporting
entities under section 6055. Penalties
under section 6721 and section 6722 are
reduced if a reporting entity files a
corrected return within 30 days after the
required filing date. Penalties also are
reduced, but by a lesser amount, if a
reporting entity makes a correction by
August 1 following the reporting date.
Penalties may be waived under section
6724 if the failure to timely and
accurately report is due to reasonable
cause and not willful neglect.
A commenter stated that reporting
entities should not be required to
submit corrected returns if the
information included on the return is
accurate at the time it is filed. The
commenter recommended alternatively
that the requirement to file corrected
returns should apply for no more than
31 days after the end of the calendar
year. Other commenters suggested a cutoff of the corrected return requirement
of 30 days past the return filing due
date.
Taxpayers require correct information
to properly complete and file their
income tax returns. The IRS must be
able to accurately match information
reporting with returns. Individuals are
subject to the section 5000A
requirement to maintain minimum

PO 00000

Frm 00036

Fmt 4700

Sfmt 4700

essential coverage on a month-to-month
basis. In the case of section 6055
reporting, a return or statement may be
incomplete or incorrect as a result of a
change in circumstances occurring after
the coverage year has ended. For
example, a child born during a month
may be enrolled in coverage retroactive
to the date of birth, or coverage may be
retroactively cancelled due to a failure
to pay premiums. Accordingly,
consistent with other information
reporting rules, the final regulations
clarify that reporting entities that fail to
timely file corrected returns and furnish
corrected statements when information
changes as a result of a change in
circumstances have filed returns that are
incomplete or incorrect within the
meaning of sections 6721 and 6722.
5. Combined Reporting
Applicable large employer members
that provide minimum essential
coverage on a self-insured basis are
subject to the reporting requirements of
both section 6055 and section 6056, as
well as the requirement under section
6051 to file Form W–2, Wage and Tax
Statement, reporting wages paid to
employees and taxes withheld. The
proposed regulations did not permit
combining section 6055 reporting with
reporting for section 6056 or 6051. The
proposed regulations allowed the use of
substitute forms for the statement to
individuals, which might have
permitted reporting entities to combine
section 6055 and section 6056 reporting
for this purpose. The preamble to
proposed regulations under section
6056 (78 FR 54986) described a number
of proposals to simplify reporting under
that section.
Commenters supported allowing
combined section 6055 and section 6056
reporting for applicable large employer
members sponsoring self-insured plans,
suggesting that there is significant
duplication in the information reported.
Some commenters requested that
combined reporting be optional and that
employers be permitted to combine
reporting for some employees but not
others.
In response to these comments, the
final regulations provide that applicable
large employer members will file a
combined return and statement for all
reporting under sections 6055 and 6056.
An applicable large employer member
that sponsors a self-insured plan will
report on Form 1095–C, completing
both sections to report the information
required under sections 6055 and 6056.
An applicable large employer member
that provides insured coverage also will
report on Form 1095–C, but will
complete only the section of Form

E:\FR\FM\10MRR1.SGM

10MRR1

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations
1095–C that reports the information
required under section 6056. Section
6055 reporting entities that are not
applicable large employer members or
are not reporting as employers, such as
health insurance issuers, sponsors of
multiemployer plans, and providers of
government-sponsored coverage, will
report under section 6055 on Form
1095–B. In accordance with usual
procedures, these forms will be made
available in draft form in the near
future.
6. Statements Furnished to Individuals
a. Deceased Recipients
The proposed regulations provided
that a reporting entity must furnish a
statement to each responsible individual
reporting 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. 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, including him or herself, in
minimum essential coverage.
Commenters requested that the final
regulations provide that a statement is
not required to be furnished to a
covered individual who dies during the
year. The commenters suggested
alternatively that a statement should not
be required for an individual who dies
during the first three months of a year
who would be exempt from the shared
responsibility payment under section
5000A because of a short coverage gap.
Under § 1.5000A–1(a), the minimum
essential coverage requirement applies
only to full months that an individual
is alive. However, section 5000A does
not provide a general exemption from
coverage for the year of death and the
coverage gap exception may not apply if
the gap began in the previous calendar
year. Accordingly, to ensure that
minimum essential coverage is properly
reflected on a decedent’s final income
tax return and the estate is not held
liable for a section 5000A payment, the
final regulations do not provide an
exception for a covered individual who
dies during the year.

pmangrum on DSK3VPTVN1PROD with RULES

b. Time for Furnishing Statements
Section 6055 and the proposed
regulations required a reporting entity to
furnish the statement on or before
January 31 of the year following the
calendar year in which minimum
essential coverage is provided.
Commenters requested that the final
regulations permit reporting entities to
furnish statements within the last

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

quarter of the calendar year of coverage
with other material required to be sent
at that time. The final regulations do not
address furnishing a statement during
the coverage year. However, the section
5000A requirement applies to each
month during a calendar year, therefore
a statement provided early in the last
calendar quarter would not report
coverage for those months. As a result,
furnishing a statement before the end of
the year increases the risk of reporting
information that changes after the end of
the year, potentially subjecting the
reporting entity to penalties.
A commenter requested that the final
regulations provide procedures for
extending the time to furnish the section
6055 statement. Accordingly, in
response to this comment, like other
information reporting rules, the final
regulations include rules allowing
reporting entities showing good cause
the flexibility to apply for an extension
of time not exceeding 30 days to furnish
statements.
A commenter requested that reporting
entities be allowed to furnish statements
reporting employer-sponsored coverage
with the employees’ Form W–2. Neither
the final regulations nor regulations
governing the furnishing of Forms W–2
under § 1.6051–1 prohibit mailing a
6055 statement with Form W–2.
Accordingly, reporting entities may
furnish the Form 1095–B or 1095–C
with the Form W–2 in the same mailing.
c. Mailing Address
The proposed regulations provided
that, if mailed, the statement required
under section 6055 must be sent to the
individual’s last known permanent
address or, if no permanent address is
known, to the individual’s temporary
address.
Commenters asked that reporting
entities be allowed to send statements to
an alternate address, such as an
employer’s address, for individuals
residing outside of the United States for
whom the entity does not have an
address. Other commenters requested
clarification that the requirement to
furnish a statement would be satisfied if
a mailing is returned to the sender.
The final regulations adopt the rule in
the proposed regulations requiring
reporting entities to send statements to
an individual’s last known address. The
final regulations add a rule, however,
that a reporting entity’s first class
mailing to the recipient’s last known
permanent address, or if no permanent
address is known, the temporary
address, discharges the requirement to
furnish the statement, even if the
statement is returned. A reporting entity
that has no address for an individual

PO 00000

Frm 00037

Fmt 4700

Sfmt 4700

13225

should send the statement to the
address where the individual is most
likely to receive it, for example to the
address the reporting entity uses for
requesting or providing information
about the coverage.
d. Electronic Furnishing of Statements
The proposed regulations permitted
electronic furnishing of statements to
individuals if the recipient affirmatively
consents. Commenters requested that
reporting entities be permitted to
furnish statements electronically unless
the recipient requests paper statements,
arguing that most recipients have access
to a computer. Other commenters
suggested that affirmative consent by
the recipient should not be required. A
commenter suggested that the final
regulations provide rules for the
electronic furnishing 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, which allows
furnishing in paper or electronic form.
Statutory and regulatory tax
information reporting rules uniformly
require a recipient’s affirmative consent
to receiving statements electronically.
See, for example, section 401 of the Jobs
Creation and Workers Assistance Act of
2002 (116 Stat. 21 (2002)); § 1.401(a)–
21(b)(2); § 31.6051–1(j)(2)(i); 2014
General Instructions for Certain
Information Returns (Forms 1097, 1098,
1099, 3921, 3922, 5498, and W–2G),
page 12. These rules protect individuals
who do not have access to or are not
comfortable using a computer.
Therefore, consistent with general
information reporting rules, the final
regulations do not permit reporting
entities to furnish statements
electronically unless an individual
affirmatively consents to electronic
furnishing.
The proposed regulations provided
that consent to receive statements
electronically may be provided in any
manner that reasonably demonstrates
that the recipient can access the
statement in the electronic format in
which it will be furnished. Commenters
suggested that consent to electronic
furnishing for other documents should
be treated as consent to electronic
furnishing of the section 6055
statement. Other commenters requested
that employers be allowed to post a
notice on the company’s Web site
advising employees that statements are
available and provide paper statements
only on request.
Consent to receive a statement in
electronic format must be in a manner
that reasonably demonstrates that the
recipient is able to access the statement

E:\FR\FM\10MRR1.SGM

10MRR1

13226

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

in the electronic format in which it will
be furnished. See for example
§ 31.6051–1(j)(2)(i). The proposed and
final regulations explicitly allow
statement recipients to provide consent
and to access section 6055 statements in
response to a notice on a Web site. A
reporting entity may simultaneously
request consent to receive an electronic
section 6055 statement and consent
regarding other statements. For instance,
a reporting entity may simultaneously
request consent to provide electronic
statements for Forms W–2 and 1095, but
each form must be specifically
referenced in the request. A general
consent to receive statements
electronically does not reasonably
demonstrate that the recipient is able to
access the section 6055 statement in an
electronic format and does not serve as
consent to receive the section 6055
statement electronically.
e. Form of Statement
i. Information on the Statement
The proposed regulations provided
that the statement furnished to the
responsible individual must include a
contact phone number for the person
required to file the return. A commenter
asked whether a reporting entity may
provide an automated response to
inquiries if a person ultimately is
available. The final regulations do not
prohibit initial automated responses if a
caller is able to reach a person during
the call.
A commenter requested that a
reporting entity be permitted to
designate a third party to be the contact
person. The final regulations clarify that
the statement only must include a
phone number for a person designated
as the reporting entity’s contact person.
The final regulations do not specify that
the contact person must be a reporting
entity’s employee or prohibit
designating a third party as the contact
person.

pmangrum on DSK3VPTVN1PROD with RULES

ii. Substitute Statements
The proposed regulations permitted
substitute statements if they 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, for example, Rev.
Proc. 2012–38 (2012–48 IRB 575), see
§ 601.601(d)(2) of this chapter.
Commenters expressed an interest in
creating substitute statements
combining information reporting under
sections 6055 and 6056 and requested
publication of a revenue procedure
providing the specifications. Other
commenters asked that reporting

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

entities be allowed flexibility in
customizing section 6055 statements in
a style recognizable to their recipients.
The final regulations permit the use of
substitute statements under section
6055 that conform to requirements
provided in published guidance. The
IRS plans to provide these requirements
in published guidance or instructions.
Employers submitting Forms 1095–C
combining reporting under sections
6055 and 6056 to the IRS also will
report the information required by those
sections to the individuals in a single
statement.
Commenters requested that the final
regulations allow reporting entities to
provide general rather than personalized
information in the section 6055
statement, for example ‘‘You were
covered by minimum essential coverage
for each month you were covered by the
plan for at least one day.’’ While the
final regulations do not adopt this
comment, it is anticipated that reporting
entities will be able to check a box on
the information return to report that an
individual was covered for all 12
months of the calendar year.
e. TIN Matching Program
Commenters requested that the IRS
TIN matching program, see Rev. Proc.
2003–09 (2003–1 CB 516) and
§ 601.601(d), include section 6055
reporting. The TIN matching program
may be used only for reportable
payments subject to backup withholding
under section 3406. Therefore, TIN
matching is not permitted for purposes
of section 6055 reporting and the final
regulations do not include section 6055
reporting in the TIN matching program.
7. Penalties
The proposed regulations applied to
calendar years beginning after December
31, 2014. Under Notice 2013–45 (2013–
31 IRB 116), the IRS will not apply
penalties for failure to comply with
section 6055 for 2014 (for coverage in
2014 and information returns filed and
statements furnished to covered
individuals in 2015).
A commenter requested that the
effective date of the section 6055
reporting requirements be extended an
additional year if final regulations are
not released by January 1, 2014, thus
requiring no reporting in 2016 for
coverage in 2015. Other commenters
requested that the IRS waive penalties
for reporting in 2016 on 2015 coverage
if a reporting entity makes a good faith
effort to comply. One commenter
requested that penalties be waived for
the two years following the release of
final regulations.

PO 00000

Frm 00038

Fmt 4700

Sfmt 4700

In implementing new information
reporting requirements, short-term relief
from penalties frequently is provided.
This relief generally allows additional
time to develop appropriate procedures
for collection of data and compliance
with these new reporting requirements.
After considering the comments
received, the IRS will not impose
penalties under sections 6721 and 6722
on reporting entities that can show that
they have made good faith efforts to
comply with the information reporting
requirements. Specifically, relief is
provided from penalties under sections
6721 and 6722 for returns and
statements filed and furnished in 2016
to report coverage in 2015, but only for
incorrect or incomplete information
reported on the return or statement,
including TINs or dates of birth. No
relief is provided in the case of
reporting entities that do not make a
good faith effort to comply with these
regulations or that fail to timely file an
information return or furnish a
statement. However, consistent with the
existing information reporting rules,
reporting entities that fail to timely meet
the requirements of these regulations
may be eligible for penalty relief if the
IRS determines that the standards for
reasonable cause under section 6724 are
satisfied.
Effective/Applicability Date
These regulations 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 (including the
provisions requiring the furnishing of
statements to covered individuals in
2015 with respect to 2014). 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).
Taxpayers are encouraged, however,
to voluntarily comply with section 6055
information reporting for minimum
essential coverage provided in 2014.
Given significant changes in the
information reporting provisions in
response to commenters’ feedback on
the proposed regulations, including
requiring applicable large employer
members to file a return that combines
section 6055 and section 6056 reporting,
reporting entities that wish to
voluntarily comply with the section
6055 information reporting provisions
for 2014 should build their systems and
report in accordance with these final
regulations. Real-world testing of
reporting systems and plan designs,
built in accordance with the terms of

E:\FR\FM\10MRR1.SGM

10MRR1

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

pmangrum on DSK3VPTVN1PROD with RULES

these final regulations, through
voluntary compliance for 2014 will
contribute to a smoother transition to
full implementation for 2015.
Special Analyses
It has been determined that these final
regulations are 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.
Sections 603 and 604 of the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) (RFA) generally require
agencies to prepare a regulatory
flexibility analysis addressing the
impact of proposed and final
regulations, respectively, on small
entities. Section 605(b) of the RFA,
however, provides that sections 603 and
604 do not apply if the head of the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities. It
is hereby certified that these regulations
will not have a significant economic
impact on a substantial number of small
entities.
Section 6055 requires a person that
provides minimum essential coverage to
an individual to file a return with the
IRS reporting information specified by
the statute and to furnish a statement
containing this information to an
individual. These final regulations
implement the underlying statute and
the economic impact is principally a
result of the underlying statute.
Specifically, these final regulations
primarily provide the time and manner
for filing and furnishing the returns and
statements that section 6055 requires.
Notice 2013–45 announced transition
relief providing that information
reporting under section 6055 will be
optional for 2014. The notice advised
that this relief would allow additional
time for dialogue with prospective
reporting entities in an effort to simplify
the reporting requirements. Between
publication of Notice 2013–45 and
publication of the proposed regulations
under section 6055, the IRS and the
Treasury Department engaged in a series
of discussions with employers, health
insurance issuers, and other reporting
entities. The proposed and final
regulations address certain concerns
expressed in those discussions.
These final regulations minimize the
burden associated with the collection of
information imposed by section 6055 in
a number of ways. The regulations limit

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

reporting to only the information that
the IRS will use to verify minimum
essential coverage and administer the
premium tax credit, all of which is
specified in the statute. For example,
the regulations do not require reporting
the amount of advance payments of the
premium tax credit and cost-sharing
reductions or the amount of the
premium for employer coverage paid by
an employer. Similarly, the only
information the regulations require for
administration of the small employer
health insurance credit under section
45R is whether a qualified health plan
was enrolled in through an Exchange.
The final regulations reduce burden for
applicable large employer members by
allowing combined reporting under
sections 6055 and 6056. The final
regulations allow for substitute
statements, furnishing of statements
with Forms W–2, and electronic
delivery consistent with other
information reporting rules. Finally, the
final regulations relieve health
insurance issuers from reporting for
individual market qualified health plans
enrolled in through an Affordable
Insurance Exchange because Exchanges
will report on these enrollments under
section 36B(f)(3).
Based on these facts, a Regulatory
Flexibility Analysis under the
Regulatory Flexibility Act is not
required.
Pursuant to section 7805(f) of the
Code, the notice of proposed rulemaking
that preceded these final regulations
was submitted to the Chief Counsel for
Advocacy of the Small Business
Administration for comment on its
impact on small business.
Drafting Information
The principal author of these final
regulations is Andrew Braden 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.
26 CFR Part 602
Reporting and recordkeeping
requirements.

PO 00000

Frm 00039

Fmt 4700

Sfmt 4700

13227

Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1, 301, and
602 are 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.
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 transmittal and
furnish statements to responsible
individuals 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)).

E:\FR\FM\10MRR1.SGM

10MRR1

pmangrum on DSK3VPTVN1PROD with RULES

13228

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

(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. The term
responsible individual includes a
primary insured, employee, former
employee, uniformed services sponsor,
parent, or other related person named
on an application who enrolls one or
more individuals, including him or
herself, in minimum essential coverage.
(12) Taxpayer identification number.
The term taxpayer identification
number (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) in the case of an employer described
in paragraph (f)(4)(i) of this section),
including each participating employer
with respect to a self-insured group
health plan or arrangement established
or maintained by more than one
employer (and not including a
multiemployer plan as defined in
section 3(37) of ERISA or 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

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

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)(i)(A) through
(c)(2)(i)(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.
(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 and
must retain a copy of the designation in
its books and records. 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)

PO 00000

Frm 00040

Fmt 4700

Sfmt 4700

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, including Medicare
Advantage) 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
Directive 5100.01, Functions of the
Department of Defense and Its Major
Components (December 21, 2010)) that
must file the returns and furnish the
statements required by this section for
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) 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
reporting is required under paragraph
(a) of this section for minimum essential
coverage that provides benefits in
addition or as a supplement to a health
plan or arrangement that constitutes
minimum essential coverage if—
(i) The primary and supplemental
coverages have the same plan sponsor;
or
(ii) The coverage supplements
government-sponsored coverage (as
defined in section 5000A(f)(1)(A) and
the regulations under that section) such
as Medicare.
(3) Individuals not enrolled in
coverage. No reporting is required under
this section for coverage offered to
individuals who do not enroll.
(e) 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) The name, address, and employer
identification number (EIN) of the

E:\FR\FM\10MRR1.SGM

10MRR1

pmangrum on DSK3VPTVN1PROD with RULES

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations
reporting entity required to file the
return;
(ii) The name, address, and TIN, or
date of birth if a TIN is not available, of
the responsible individual, except that
reporting entities may but are not
required to report the TIN of a
responsible individual not enrolled in
the coverage;
(iii) The name and TIN, or date of
birth if a TIN is not available, of each
individual who is 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
(e)(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) The 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.
(f) Time and manner 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 as
specified in forms or instructions. For
extensions of time for filing returns
under this section see §§ 1.6081–1 and
1.6081–8. See § 301.6011–2 of this
chapter for rules relating to electronic
filing.
(2) Form of return—(i) Applicable
large employer members. A reporting
entity that is reporting under section
6055 as an applicable large employer
member (as defined in § 54.4980H–
1(a)(5) of this chapter) makes the return
required under this paragraph (f) on
Form 1094–C and Form 1095–C or other
form designated by the Internal Revenue
Service.

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

(ii) Reporting entities not reporting as
applicable large employer members.
Entities reporting as health insurance
issuers or carriers, sponsors of selfinsured group health plans that are not
reporting as applicable large employer
members, sponsors of multiemployer
plans, and providers of governmentsponsored coverage, will report under
section 6055 on Form 1094–B and Form
1095–B or other form designated by the
Internal Revenue Service.
(iii) Substitute forms. Reporting
entities may make the return required
under this paragraph (f) 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
responsible 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. For purposes
of the penalty under section 6722,
furnishing a statement to the
responsible individual is treated as
furnishing a statement to the payee. The
statement must show—
(i) The phone number for a person
designated as the reporting entity’s
contact person and policy number, if
any; and
(ii) Information described in
paragraph (e) of this section required to
be shown on the section 6055 return for
the responsible individual and each
covered 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 a copy of the
return filed with the Internal Revenue
Service or on a substitute statement. A
substitute statement must include the
information required to be shown on the
return filed with the Internal Revenue
Service and must comply with
requirements in published guidance (see
§ 601.601(d)(2) of this chapter) relating
to substitute statements. An Internal
Revenue Service truncated taxpayer
identification number may be used as
the identification number for an
individual in lieu of the identification
number appearing on the corresponding
information return filed with the
Internal Revenue Service.
(4) Time and manner for furnishing
statements—(i) Time for furnishing—(A)

PO 00000

Frm 00041

Fmt 4700

Sfmt 4700

13229

In general. 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.
(B) Extensions of time—(1) In general.
For good cause upon written application
of the person required to furnish
statements under this section, the
Internal Revenue Service may grant an
extension of time not exceeding 30 days
in which to furnish these statements.
The application must be addressed to
the Internal Revenue Service, and must
contain a full recital of the reasons for
requesting the extension to aid the
Internal Revenue Service in determining
the period of the extension, if any, that
will be granted. A request in the form
of a letter to the Internal Revenue
Service, signed by the applicant,
suffices as an application. The
application must be filed on or before
the date prescribed in paragraph
(g)(4)(i)(A) of this section.
(2) Automatic extension of time. The
Commissioner may, in appropriate
cases, prescribe additional guidance or
procedures, published in the Internal
Revenue Bulletin (see § 601.601(d)(2) of
this chapter), for automatic extensions
of time to furnish to one or more
individuals the statement required
under section 6055.
(ii) Manner of furnishing. If mailed,
the statement must be sent to the
responsible individual’s last known
permanent address or, if no permanent
address is known, to the individual’s
temporary address. For purposes of this
paragraph (g)(4), a reporting entity’s first
class mailing to the last known
permanent address, or if no permanent
address is known, the temporary
address, discharges the requirement to
furnish the statement. A reporting entity
may furnish the statement electronically
if the requirements of § 1.6055–2 are
satisfied.
(h) Penalties—(1) In general. For
provisions relating to the penalty for
failure to file timely a correct
information return required under
section 6055, see section 6721 and the
regulations under that section. For
provisions relating to the penalty for
failure to furnish timely a correct
statement to responsible individuals
required under section 6055, see section
6722 and the regulations under that
section. See section 6724 and the
regulations under that section for rules
relating to the waiver of penalties if a
failure to file timely or accurately is due
to reasonable cause and is not due to
willful neglect.
(2) Application of section 6721 and
6722 penalties to section 6055 reporting.

E:\FR\FM\10MRR1.SGM

10MRR1

13230

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations

For purposes of section 6055 reporting,
if the information reported on a return
(including a transmittal) or a statement
required by this section is incomplete or
incorrect as a result of a change in
circumstances (such as a retroactive
change in coverage), a failure to timely
file or furnish a corrected document is
a failure to file or furnish a correct
return or statement under sections 6721
and 6722.
(i) [Reserved.]
(j) 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 for
failure to comply with the section 6055
reporting requirements for coverage in
2014 (for information returns filed and
statements furnished in 2015).

pmangrum on DSK3VPTVN1PROD with RULES

§ 1.6055–2 Electronic furnishing of
statements

(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
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
consent requirement of this paragraph
(a)(2) is not satisfied if the recipient
withdraws the consent and the
withdrawal takes effect before the
statement is furnished. The furnisher
may provide 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. The
furnisher also may provide that a
recipient’s request for a paper statement
will be treated as a withdrawal of the
recipient’s consent.
(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

VerDate Mar<15>2010

17:54 Mar 07, 2014

Jkt 232001

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 from
the recipient, in the manner described
in paragraph (a)(2)(ii) of this section, a
new consent or confirmation of consent
to receive the statement electronically.
(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 electronically. The email
attachment uses the same electronic format
that F will use for the 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 statement
electronically. The consent via the secure
Web page uses the same electronic format
that F will use for electronically furnishing
the statement. 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).

PO 00000

Frm 00042

Fmt 4700

Sfmt 4700

(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 date of 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.
(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

E:\FR\FM\10MRR1.SGM

10MRR1

13231

pmangrum on DSK3VPTVN1PROD with RULES

Federal Register / Vol. 79, No. 46 / Monday, March 10, 2014 / Rules and Regulations
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. If the
furnisher has corrected a recipient’s
statement and the original statement
was furnished electronically, the
furnisher must furnish a corrected
statement to the recipient 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 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

VerDate Mar<15>2010

15:44 Mar 07, 2014

Jkt 232001

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 furnished in 2015).
■ Par. 3. Section 1.6081–8 is amended
in paragraph (a) by adding the language
‘‘1095 series,’’ between the words
‘‘1042–S,’’ and ‘‘1098’’.
PART 301—PROCEDURE AND
ADMINISTRATION

(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).
*
*
*
*
*
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
Par. 8. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805 * * *

Par. 9. In § 602.101, paragraph (b) is
amended by adding two entries in
numerical order to the table to read as
follows:

■

§ 602.101

*

Par. 4. The authority citation for part
301 continues to read in part as follows:

OMB Control numbers.

*
*
(b) * * *

*

*

CFR part or section where
identified and described

■

Current OMB
control No.

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

Par. 5. Section 301.6011–2 is
amended in the first sentence of
paragraph (b)(1) by adding ‘‘1094 series,
1095 series,’’ after ‘‘1042–S’’.
■ Par. 6. Section 301.6721–1 is
amended by removing the word ‘‘or’’ at
the end of paragraph (g)(3)(xxii),
removing the period and adding a semicolon in its place at the end of
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.

*

*
*
*
*
(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’’ at
the end of paragraph (d)(2)(xxxi),
removing the period and adding a semicolon in its place at the end of
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.

*

PO 00000

*

*

Frm 00043

*

Fmt 4700

*

Sfmt 4700

*
*
*
1.6055–1 ...............................
1.6055–2 ...............................
*

*

*

*

*

*

*

*

*
1545–2252
1545–2252

*

*

*

John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: March 2, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2014–05051 Filed 3–5–14; 4:15 pm]
BILLING CODE 4830–01–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 301 and 602
[TD 9661]
RIN 1545–BL26

Information Reporting by Applicable
Large Employers on Health Insurance
Coverage Offered Under EmployerSponsored Plans
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:

This document contains final
regulations providing guidance to

SUMMARY:

E:\FR\FM\10MRR1.SGM

10MRR1