Insurer Backs Changes to Healthcare Reporting Requirements
Insurer Backs Changes to Healthcare Reporting Requirements
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2022-4163
- Tax Analysts Electronic Citation2022 TNTF 26-26
February 4, 2022
Internal Revenue Service
CC:PA:LPD:PR (REG-109128-21)
Room 5203
P.O. Box 7604
Ben Franklin Station,
Washington, DC 20044
Re: Information Reporting of Health Insurance Coverage and Other Issues — Proposed Rule
Dear Sir or Madam:
UnitedHealthcare (UHC) is writing in response to the Proposed Rule on Information Reporting of Health Insurance Coverage and Other Issues. The Proposed Rule was published by the Internal Revenue Service (IRS) in the Federal Register on December 6, 2021 (86 FR 68939). As discussed below, UHC supports the proposed changes to the reporting requirements established under Code Sections 6055 and 6056. We also recommend ways to streamline the reporting process that support greater tax efficiency as well as support the Administration's goals to reduce climate pollution through actions across the federal government.1
UHC is dedicated to helping people live healthier lives and making the health system work better for everyone by simplifying the health care experience, meeting consumer health and wellness needs, and sustaining trusted relationships with care providers. In the United States, UHC offers the full spectrum of health benefit programs for individuals, employers, and Medicare and Medicaid beneficiaries, and contracts directly with more than 1.3 million physicians and care professionals, and 6,500 hospitals and other care facilities nationwide. The company also provides health benefits and delivers care to people through owned and operated health care facilities in South America.
UHC and its parent UnitedHealth Group (UHG) have a strong commitment to addressing climate health and sustainability and is actively deploying strategies to improve our impact on the communities we serve by achieving operational net zero emissions by 2035. Some of these initiatives are outlined in UHG's 2020 Sustainability Report.2 In addition, UHG CEO Andrew Witty is honored to co-chair the National Academy of Medicine's Action Collaborative on Decarbonizing the U.S. Health Sector that launched in September 2021. This public-private partnership of leaders from across the health system is committed to addressing the sector's environmental impact while strengthening its sustainability and resilience.
Making Forms 1095-B and 1095-C Available on Request
The IRS is proposing to make permanent through rulemaking its policy first outlined in Notice 2020-76 that Form 1095-B should be made available on request rather than automatically mailed out to all primary subscribers.3 Additionally, the Proposed Rule will extend this flexibility to applicable large employers (ALEs) to provide Form 1095-C on request to part time employees.
As UHC has previously commented to the IRS, we support allowing health insurance issuers to make a copy of Form 1095-B available on request to members. We also support permitting ALEs to make Form 1095-C available on request to part-time employees. We believe the notice requirements in the Proposed Rule — posting the notice on the insurer or employer website, providing information on how to obtain a paper copy, and maintaining the notice until October 15 on the year following the tax year — are sufficient to give taxpayers notice of the availability of the information if needed.
As noted in the preamble to the Proposed Rule, the penalty for failure to maintain insurance coverage is zero and taxpayers do not need Form 1095-B to complete their federal tax returns. Our experience is that very few of our primary subscribers request a copy of Form 1095-B. Out of the almost six million Forms 1095-B prepared by UHC for the 2020 tax year, fewer than 2,000 were requested by members and delivered by mail.4
UHC also recommends that the IRS permit employers to make Form 1095-C available on request for all employees (both full and part time). We recognize that the notice indicates whether the employee was offered minimum essential coverage by the employer and may be needed by a taxpayer to qualify for Exchange health coverage or a premium tax credit. However, these scenarios are very limited and employers could instead indicate in the required website disclosure that the information may be required to obtain Exchange coverage and premium tax credits.
We believe that in addition to streamlining tax administration by employers and insurers, that there is an important environmental impact if insurers and employers are allowed to make the notices available on request. Prior to the IRS guidance allowing health insurers to make the notice available on request, UHC printed and mailed around five million Forms 1095-B each year which resulted in printing over 10 million pages for the notice.5 Eliminating printing for five million Forms 1095-B produces the following estimated yearly reductions in lifecycle environmental impacts6:
200 U.S. short tons wood use
1.270 million BTUs in energy use
899,000 pounds CO2 equivalent
1.07 million gallons of water use
58,900 pounds of solid waste
UHC strongly believes that giving our members the option to access information digitally — across all governmental mandated notices — will significantly reduce the carbon impact and environmental footprint of our business and we appreciate IRS' contribution to those efforts through this rulemaking. We would also note that most taxpayers prefer to use digital filing — according to the IRS, almost 94.3 percent of individual tax returns for FY2020 were filed electronically.7
Allowing an Extension of Time to Provide Notices
The IRS is proposing to make permanent the automatic extension of time for health insurers and employers to make Forms 1095-B and 1095-C available to subscribers and employees. As noted in the preamble to the Proposed Rule, the IRS previously issued guidance (Notice 2020-76) which provided an automatic extension of time from January 31 to March 2 for reporting entities to make the notices available. UHC supports making this flexibility available through rulemaking thereby allowing an automatic extension of up to 30 days for a health insurer or ALE to provide the reporting form to the taxpayer. While we make Form 1095-B available by the January 31 deadline, we appreciate there are situations where some reporting entities, such as small employers, may need additional time and would benefit from the automatic extension.
Streamlining the Collection of Social Security Numbers
IRS is also requesting feedback on any additional changes that may be needed to the reporting requirements under Code Sections 6055 and 6056. UHC continues its request made in prior comments that the IRS modify the requirements for health insurers to make three attempts to solicit a social security number (SSN) from all individuals covered under the policy and not just the primary subscriber. Under current IRS rules, UHC is required to request the SSN at enrollment and then make two additional solicitations if the SSN is not provided.
As we have noted previously, we have little success in getting the SSNs from our members if not obtained at enrollment. There is a potential for member confusion and dissatisfaction when they receive a request for their SSN, as well as privacy and security concerns of the member regarding such solicitations. We would also note that while the number of annual solicitations is relatively small for UHC — around 300,000 — these communications present the same negative environmental impacts as noted above. Each solicitation mailing consists of six printed pages — or three pages front and back — resulting in 900,000 pages of printed and mailed notices resulting in the following environmental impacts each year8:
20 U.S. short tons wood use
127 million BTUs in energy use
89,900 pounds CO2 equivalent
107,000 gallons of water use
5,890 pounds of solid waste
As a practical matter, the IRS does not need SSNs for all of our insured members. The Form 1095-B is not included in the member's federal tax return because taxpayers no longer have to validate that they had health insurance coverage during the prior year (since the penalty has been removed). As a result, there is no need to verify the identity of the taxpayer or covered family members.
As an alternative, the IRS could provide access by health insurers to the SSN verification system allowing the insurer to obtain the information without having to reach out to members, thus saving paper, reducing the environmental impact, and not creating potential member confusion, annoyance or privacy concerns with an SSN request that experience has shown is generally ignored.
Thank you for your thoughtful consideration of our comments. Please do not hesitate to contact me if you have any questions.
Sincerely,
Joy O. Higa
Chief Compliance Officer
Senior Vice President, Regulatory Affairs
United Healthcare
FOOTNOTES
1E.O. 14008, Tackling the Climate Crises at Home and Abroad, January 27, 2021.
2Available at Sustainability — UnitedHealth Group (uhg.com)
3Notice 2020-76 applied this approach for the 2020 tax year.
4In addition to requested Forms 1095-B, UHC mailed around one million Forms 1095-B to subscribers in jurisdictions that require the notice for state or local tax filings (DC, CA, NJ, RI), and in connection with our solicitation of taxpayer identification numbers from members.
5Form 1095-B and the accompanying instructions is three single sided pages in length resulting in a document printed front and back of two pages.
6The estimates exclude additional reduction to environmental impact from reduced use of envelopes and are derived from the Environmental Paper Network Paper Calculator™ accessed at: Paper Calculator 4.0 | Environmental Paper Network
7Internal Revenue Service, Returns Filed, Taxes Collected & Refunds Issued accessed at: Returns Filed Taxes Collected and Refunds Issued | Internal Revenue Service (irs.gov)
8The estimates exclude additional reduction to environmental impact from reduced use of envelopes and are derived from the Environmental Paper Network Paper Calculator™ accessed at: Paper Calculator 4.0 | Environmental Paper Network
END FOOTNOTES
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2022-4163
- Tax Analysts Electronic Citation2022 TNTF 26-26