Health Insurer Urges Flexibility in Healthcare Reporting Rules

February 4, 2022

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
Attention: REG-109128-21
P.O. Box 7604
Ben Franklin Station
Washington, D.C., 20044

Re: Information Reporting of Health Insurance Coverage and Other Issues (REG-109128-21)

Dear Commissioner Rettig,

UPMC Health Plan and the integrated companies of the UPMC Insurance Services Division (collectively, "UPMC") are pleased to submit the following comments in response to the Internal Revenue Service's (IRS or the “Agency”) Information Reporting of Health Insurance Coverage and Other Issues Proposed Rule, as published in the Federal Register at (the “Proposed Rule”).

UPMC offers a wide range of commercial group and individual, Medicare, Medicaid, CHIP, MLTSS and ancillary coverage products to consumers in Pennsylvania, West Virginia, and Ohio. Since beginning operations in 1996, UPMC has been recognized for its dedication to quality and the provision of outstanding customer service across its product lines, which collectively provide commercial or government programs coverage to more than 4 million members. UPMC has offered consumers a variety of coverage options as a QHP issuer since the launch of the Marketplace in 2014, and currently provides coverage to approximately 113,000 Marketplace enrollees.

We thank the IRS for affording issuers and other stakeholders an opportunity to provide comments in response to proposed changes related to statement furnishing requirements under revenue code (IRC) sections 6055 and 6056. UPMC supports providing all individuals with comprehensive and affordable health coverage as well as offering members timely, readily accessible information on the terms of their coverage. It is with this support in mind that we respectfully offer the following comments in response to the Proposed Rule.

Alternative Manner of Furnishing Statements Under Section 6055

The IRS proposes an alternative manner for reporting entities to furnish form 1095-B to individuals rather than requiring the mailing of physical copies of the form to all applicable individuals. Under this alternative reporting allowance, the reporting entity must post a clear and conspicuous notice on the entity's website stating that responsible individuals may receive a copy of their statements upon request. The notice must include an email address, a physical address to which a request may be sent, and a telephone number that individuals may use to contact a reporting entity with any questions. This alternative manner of furnishing will apply only to taxable years when the shared responsibility payment amount is zero.

As the IRS notes, the Tax Cuts and Jobs Act of 2017 reduced the individual shared responsibility payment to zero for months beginning after December 31, 2018. As such, individuals do not currently need the information on Form 1095-B to compute federal tax liability or file an income tax return with the IRS in order to avoid the applicable penalty. Payers and other required Form 1095-B reporting entities have traditionally expended significant financial resources to physically produce and furnish the requisite forms. In years when distribution of physical forms was affirmatively required for all applicable individuals, UPMC spent many thousands of dollars annually in printing and mailing costs in order to furnish these physical forms to our members since Section 6055 was first implemented. While incurring these distribution costs may have been justified when the individual shared responsibility payment was greater than zero, maintaining reporting requirements that existed prior to the passage of the Tax Cuts and Jobs Act will force reporting entities to expend limited resources unnecessarily, and to do so at a time when keeping unnecessary administrative costs low is of paramount importance to maintaining coverage affordability. As these forms now have limited utility to members, permanently altering reporting requirements to only require the furnishing of 1095-B Forms upon request will allow UPMC to reallocate resources to directly improve or maintain services, benefits, and affordability for our members. We thank the IRS for granting reporting entities flexibility in furnishing 1095-B forms and we encourage the IRS to permanently adopt this standard in the Final Rule.

Extension of Deadline for Furnishing Statements

The Proposed rule would automatically extend the deadline to furnish 1095-B forms to individuals from January 31st to March 2 or the following business day if that date occurs during a weekend or federal Holiday. UPMC strives to furnish information statements to our members as soon as practicable. However, we note that it is not possible for issuers and other reporting entities to produce 1095-B forms until we have received certain required information from employers and other third-party entities. Because employers often have many competing deadlines and priorities for financial, benefits, and human resources reconciliation and reporting at the end of the calendar year, finite administrative resources, both within employers and across the reporting service industry, are often focused on compiling and verifying information, rather than transmitting the same, until at or shortly before any applicable reporting deadline for a given report or required document. As such, in many cases the data necessary to complete Form  1095-B cannot be finalized, and processing of the forms by issuers cannot begin, until shortly before they are due to plan members. We believe that the modified deadline of March 2 appropriately acknowledges the reasonable prioritization of other, more consequential reporting functions following the end of the year, and affords issuers the time necessary to verify information, produce any required 1095-B forms, complete quality control checks, and distribute the forms to members. We thank the IRS for granting reporting entities additional time to furnish 1095-B forms to individuals and we encourage the IRS to permanently adopt this standard in the Final Rule.

We again thank the IRS for affording issuers and other stakeholders the opportunity to provide input on the filing and furnishing of annual information returns and statements regarding coverage provided. We appreciate your consideration of our comments and look forward to continued collaboration with the IRS in the future.

Respectfully Submitted,

Caleb B. Wallace, Esq., MPH
Vice President, Health Policy & Regulatory Affairs
Assistant Counsel
UPMC Health Plan
Pittsburgh, PA