Health Insurer Urges IRS to Extend Reporting Relief

February 1, 2021

William Paul
Acting Chief Counsel
Internal Revenue Service
Attention: Notice 2020-76
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

Re: Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020 (Notice 2020-76)

Dear Mr. Paul,

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 (IRS) Notice (the "Notice") regarding the extension of due dates for certain information-reporting requirements and relief from penalties for certain aspects of information-reporting requirements under sections 6055 and 6056 of the Internal Revenue Code.

UPMC offers a wide range of commercial group and individual, Medicare, Medicaid, CHIP, 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 3.5 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 124,000 Marketplace enrollees. In several Pennsylvania counties, UPMC is the only QHP issuer currently offering a product through the Marketplace.

We thank the IRS for affording issuers and other stakeholders an opportunity to provide comments in response to guidance related to statement furnishing requirements under sections 6055 and 6056. UPMC supports providing all individuals with comprehensive and affordable health coverage, as well as offering members 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 Notice.

Extension of Due Date for Furnishing Information Statements to Individuals under Sections 6055 and 6056

In the Notice, the IRS extends the due date for furnishing the 2020 Forms 1095-B and 1095-C, from January 31, 2021, to March 2, 2021 and specifically requests comment as to whether an extension of the due date for furnishing statements to individuals under section 6056 will be necessary for future years. 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. In many cases, this limits our ability to begin processing the forms until shortly before they are due. In order to provide accurate and complete 1095-B Forms to members, we require a certain period of time in which to verify information, produce and perform quality control checks on the forms. Given the constraints on our ability to begin work on the forms until we receive all relevant information, we believe that it is appropriate that the IRS continue to grant reporting entities additional time to complete the forms. Importantly, we do not believe the delays in information submission from third parties are likely to be resolved without significant intervention. As such, we request that the IRS continue to extend the due dates in future years for information-reporting requirements under sections 6055 and 6056 as the IRS has previously done. We also request that the IRS announce its intention concerning the extension of due dates for information reporting requirements as soon as possible, so that reporting entities have sufficient time to plan for the furnishing of required forms.

Relief Regarding the Furnishing Requirement under Section 6055

In the Notice, the IRS indicates that for 2020, it will not assess a penalty against reporting entities for failing to furnish a Form 1095-B to responsible individuals so long as the reporting entity posts a notice on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request and the reporting entity furnishes a 1095-B to an individual within 30 days of the request being received. In the Notice, the IRS also requests comment as to whether and how the reporting requirements under section 6055 should change for future years.

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 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 forms. UPMC has spent hundreds of thousands of dollars annually in printing, mailing and other related compliance costs in order to furnish these forms to our members since Section 6055 was first implemented. While incurring these costs was 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 would allow UPMC to reallocate resources to directly improve services and benefits for our members. For all future years, we ask that the IRS modify reporting requirements under section 6055 so that reporting entities are only required to furnish 1095-B Forms upon request.

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