CVS Health Seeks Permanent Health Coverage Reporting Relief

February 1, 2021

Internal Revenue Service
1111 Constitution Ave., NW
Washington, DC 20224

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

CVS Health respectfully submits the following comments on IRS Notice 2020-76, Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020 (the “Notice”).

Relief Regarding Furnishing Requirement under Section 6055

CVS Health welcomed the relief made available to taxpayers under the Notice, and we respectfully request that the IRS continue to provide — or consider making permanent — the relief from penalties under section 6722 related to Form 1095-B. This important relief allows taxpayers that would otherwise be penalized for failing to furnish a Form 1095-B if two conditions are met: (a) the reporting entity posts a notice prominently on its website stating that insured individuals may receive a copy of their Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions and (b) the reporting entity furnishes a Form 1095-B to any insured individual upon request within 30 days of the date the request is received. The reporting entity may furnish these statements electronically if it meets the requirements provided in Treasury Regulations section 1.6055-2.

The relief provided by the Notice benefits not only the reporting entity, but also insured individuals. The benefit to both the reporting entity and to insured individuals is that it eliminates a significant expense that is not necessary for and unrelated to the provision of minimum essential coverage. Eliminating unnecessary administrative and other expenses such as this one reduces the total cost of delivering quality healthcare, benefitting both the reporting entity and the insured.

Another benefit of the relief provided by the Notice is that tax return preparation for insured individuals is likely to be simplified when the Form 1095-B is not received by mail. Many individual taxpayers struggle to understand the use of all of the different information reporting forms (over twenty different types) that they automatically receive from employers, brokers, banks and any number of other reporting entities. For example a taxpayer could receive a Form 1099-INT from one institution (indicating that he or she received interest), a Form 1098-E from another institution indicating (that he or she paid interest on a student loan that may or may not be deductible) and a Form 5498 from yet another institution (indicating contributions made to an IRA). While many of these forms contain information necessary to file a complete and accurate tax return, the information contained in the Form 1095-B is no longer necessary for taxpayers to complete their returns. Even when the 1040 required taxpayers to attest to the fact that they had minimum essential coverage, most taxpayers were able to properly complete and file their annual income tax return without first receiving a Form 1095-B. By eliminating the need to print and mail such forms to all insured individuals, the relief provided in the Notice simplifies the tax return preparation process for insured individuals.

In addition to continuing to provide this important relief, we respectfully request the IRS consider modifying the conditions required by the Notice to qualify for it:

The first condition requires a notice on the reporting entity's website that lists an email, physical address and a telephone number for insured individuals to request a Form 1095-B. Since insured individuals will have navigated to the reporting entity's website in order to get this information, the notice should not require the email address, written address and telephone number. The condition could be modified to alternatively be satisfied if the reporting entity provides access on its website to a member portal through which the requesting taxpayer can receive a Form 1095-B via electronic download.

Sending a written request to or calling a customer service representative takes additional time and adds an avoidable cost to providing health care. Member portals and electronic delivery, which are common across the health care industry, should be the first choice to avoid unnecessary costs. Where a member portal is not provided by the reporting entity, the required notice should have the email address, written address, and telephone number for the individual to make a request for the form, with the option that it be provided electronically to an email address if electronic delivery is available for the individual.

In addition, as stated above, if the two conditions in the Notice are satisfied, the reporting entity may furnish Form 1095-B electronically if the requirements of Treasury Regulations section 1.6055-2 are met. Treasury Regulations section 1.6055-2(a)(2) requires that the taxpayer give affirmative consent to receive the form in electronic format. Where the reporting entity provides a web portal to access the individual's Form 1095-B, no affirmative consent specific to Form 1095-B should be required if the reporting entity provides other insurance documents or communications to the taxpayer.

Further, we respectfully request that the IRS continue to provide or make permanent relief from the requirements of §1.6055-2 Electronic furnishing of statements. Where reporting entities maintain web portals that provide individuals with access to their insurance documents and other insurance communications, no affirmative consent should be required for Form 1095-B as required in §1.6055-2(a)(2)(i).

Finally, we respectfully request that the IRS consider expanding the relief provided by the Notice to the other information reporting requirements, including the requirement to provide certain information reporting forms (such as Forms 1099 or 1098) in hardcopy unless an affirmative election is made to provide such forms electronically. More specifically, rather than require affirmative written consent from the taxpayer in order to provide such forms electronically, we respectfully request that the IRS instead allow the reporting entity to provide an electronic version of the required information reporting form unless the taxpayer makes an affirmative election to receive a paper copy through the mail. Penalizing reporting entities that have invested in electronic solutions for information reporting for failure to obtain specific affirmative consent to electronically transmit an information return serves as a disincentive for reporting entities to make such electronic versions available to taxpayers. We urge the IRS to make every effort to encourage reporting entities to create processes and invest in technology that allows secure electronic delivery of information returns, rather than disincentivizing such efforts. In so doing, the IRS will extend the clear and important benefits provided by this Notice to much larger groups of taxpayers and reporting entities.

Extension of Due Date for Furnishing Information Statements to Individuals under Section 6055 and 6056 for 2020.

We respectfully request the IRS continue to provide or make permanent an automatic 30 day extension to provide Forms 1095-B and 1095-C to individuals.

The automatic extension of the due date of Forms 1095-B and 1095-C for up to 30 days from the original due date of January 31 is important relief and required to ensure accurate information is provided to the individual and the IRS. Forms 1095-B and 1095-C require monthly data from January through December for each individual. Individuals may have changes in coverage due to life events that require validation after December 31 and retroactive treatment back to December requiring updated data for filing. Our experience has shown that consolidating and reconciling individual coverage information has taken several weeks after December 31 and cannot start until several business days after December 31 due to normal business process and month end validation of coverage.

Once the data is ready for filing with the IRS via the Affordable Care Act Information Returns (AIR) System, the submission of the batch files to the IRS begins and is to be completed by March 31. However, the batch filings are often rejected by AIR due to data and formatting errors. It may take a full week to perform analytics on the batch file to identify errors and resubmit. This process repeats until the batch file is accepted by the IRS. Therefore, providing a Form 1095-B or 1095-C to an individual prior to batch file acceptance by AIR could result in incorrect information provided to the individual and the need to provide a corrected form. The automatic 30 day extension allows the necessary time to make certain the Form 1095-B or 1095-C provided to the individual and the data provided to the IRS are both accurate and the same.