Plan Seeks Transitional Relief Under Minimum Essential Coverage Regs

February 4, 2022

Internal Revenue Service
Department of the Treasury
Ben Franklin Station
Washington, DC 20044

RE: IRS Notice — Information Reporting of Health Insurance Coverage and Other Issues Under §§5000A, 6055, 6056 (REG-109128-21)

With over 30 years in business, Priority Health is the second largest health plan in Michigan, offering a broad portfolio of health benefits options for employer groups and individuals, including Medicare and Medicaid plans. Serving more than a million members each year and offering a broad network of primary care physicians in Michigan, Priority Health continues to be recognized as a leader for quality, customer service, transparency and product innovation. Learn more about affordable, quality health coverage options from Priority Health.

We appreciate the opportunity to comment on the IRS Notice regarding Information Reporting of Health Insurance Coverage and Other Issues Under §§5000A, 6055, 6056.

Time and Manner for Furnishing Statements under Sections 6055 and 6056

Form 1095-B

We appreciate the Administration providing an alternative method to supply taxpayers with Form 1095-B. Allowing payers to provide this information online and by request can provide some efficiencies in our internal processes.

However, Priority Health has concerns about the reasoning and the value behind the requirement to provide Form 1095-C to taxpayers. The individual shared responsibility payment required most Americans to purchase health coverage or face a tax penalty. When Congress passed the Tax Cuts and Jobs Act in late 2017, the individual mandate was set to $0 for tax years beginning in 2019.

Section 6055 of the Tax Code requires insurers and plan sponsors to provide a Form 1095-B to subscribers enrolled in health plans showing the months they and their dependents were covered in the previous tax year. Said information must also be submitted in a filing to the IRS. The individual mandate and Form 1095-B were designed to be complementary with Section 6055 reporting providing taxpayers proof they did not owe a penalty.

Since 2019, the individual mandate has been set to $0 but insurers and plan sponsors must continue to complete Section 6055 reporting. We recommend the Treasury issue transitional relief for completing Section 6055 reporting for tax years when the penalty is set at $0. Taking this regulatory activity would ensure the Treasury is able to reinstate the reporting requirement should Congress take action to reestablish the penalty in the future. This unnecessary reporting costs plan sponsors and health plans millions of dollars each year and contributes to the increasing cost of health care. The relief offered by providing plans the ability to provide forms online is not practical as the expense in maintaining the reporting system exceeds mailing costs annually. Issuers and plan sponsors must continue to maintain this recordkeeping since IRS continues to require the Form 1094-B transmittal and the Forms 1095-B creation upon request. If we have to provide for a single member, the cost of creating by hand is prohibitive thus forcing the continued operation of the Section 6055 reporting data creation. We urge the Department to align the regulatory rules around this requirement with the statutory actions made by Congress.

We appreciate your consideration of our concerns and recommendation. Similar to the goals of the Administration, it is our desire to lower the costs of healthcare and to ensure it's affordable for our members. Eliminating unnecessary costs, such as providing this form, is another step in the direction of this shared goal.

Sincerely,

Nick Gates
Senior Vice President, Finance
PriorityHealth