BCBS Seeks Permanent Extension of Health Coverage Reporting Relief

February 1, 2021

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2020-76)
Room 5203
1111 Constitution Avenue, N.W.
Washington, DC 20224

RE: Notice 2020-76, Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020

Dear Commissioner Rettig:

The Blue Cross and Blue Shield Association (BCBSA) appreciates the opportunity to respond to the Internal Revenue Service (IRS) on Notice 2020-76, Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020.

BCBSA is a national federation of 36 independent, community-based and locally operated Blue Cross and Blue Shield (BCBS) companies (Plans) that collectively provide health care coverage for one in three Americans. For more than 90 years, BCBS Plans have offered quality health care coverage in all markets across America — serving those who purchase coverage on their own as well as those who obtain coverage through an employer, Medicare, and Medicaid.

Reporting of coverage information is important to IRS administration of the employer shared responsibility provisions as well as premium tax credits. We believe that the timing and method of coverage reporting should assist filers and BCBS Plan members through efficient reporting procedures.

To achieve these goals, we recommend that the IRS:

• Make permanent the extension of the due date to provide to individuals the statements in Forms 1095-B and 1095-C;

• Make permanent relief for furnishing Form 1095-B to individuals; and

• Extend good faith relief for reporting and furnishing Forms 1095-B and 1095-C.

Make Permanent the Delayed Due Date to Provide to Individuals the Statement in Form 1095-B and Form 1095-C

The requirement to furnish Forms 1095-B and 1095-C comes at Jan. 31, the same time employers are required to provide Form W-2 to employees. Permanently allowing an additional 30 days to provide this information to individuals will allow employers to focus on providing Form W-2 to employees in a timely manner. Further, due to the planning and systems changes needed to implement the delayed reporting, it would be better to formalize the delay in reporting rather than have the delay announced year to year late in the fall. With the additional time set by regulation, it will make it easier for employers to take advantage of the additional time.

Make Permanent the Relief on Furnishing Statements Required By Section 6055

The relief permitting the statements in Form 1095-B to be provided through notice on a website and providing statements on request is appropriate in that the tax penalty for failure to comply with the individual shared responsibility requirement in Code Section 5000A was reduced to $0 by Public Law No. 115-97, § 11081, beginning in 2019. Because there is no need for taxpayers to receive documentation that they have minimum essential coverage for federal income tax purposes, it is appropriate that the documentation be received only by those who want it rather than sent to everyone. This approach is also efficient in that that it is reasonably calculated to inform taxpayers of the availability of statements without the expense of sending the statement to every taxpayer, most of whom have no need for these statements.

This is another situation in which it would be better to formalize this procedure rather than have the procedure announced year to year late in the fall. With this approach set by regulation, it will make it easier for Plans and other entities required to provide statements to take advantage of this notice procedure.

Further, the IRS should revise its web pages that still refer to some evidence of coverage being required to support filing an individual federal income tax return. For example, in a Q & A entry,¹ the IRS describes the need to keep documentation to support responding to a question about minimum essential coverage (MEC). Filers do not need documentation of MEC for filling out their tax return. This Q & A and similar outdated provisions on the IRS website should be updated to eliminate this sort of information.

Extend Good-Faith Relief for Reporting and Furnishing under Sections 6055 and 6056 for Future Years

Notice 2020-76 describes the relief for 2020 as the “final” extension of good faith reporting relief under Code Sections 6055 and 6056, but Treasury/IRS should keep an open mind on good faith relief because of the continuing uncertain status of the Affordable Care Act (ACA). As Treasury/IRS know, the ACA has been under constant legal challenges since its enactment, and those challenges relate to Internal Revenue Code provisions that are part of the ACA. Currently, the Supreme Court has under submission a case challenging the ACA. California v. Texas, No. 19-840 (argued Nov. 10, 2020). These shifting sands as to foundation of the coverage reporting requirements indicate that Treasury/IRS should keep an open mind on good faith reporting relief until the underlying law is no longer subject to these fundamental challenges.

We appreciate the opportunity to provide comments regarding Notice 2020-76 and coverage reporting under sections 6055 and 6056. We ask that the IRS and Treasury issue final forms and final instructions as soon as possible. If you have any questions, please contact Richard White at Richard.White@bcbsa.com or 202.626.8613.

Sincerely,

Kris Haltmeyer
Vice President, Legislative and Regulatory Policy
Blue Cross Blue Shield Association