Automatic extension for furnishing health coverage statements proposed

By Paul Bonner

The IRS proposed to permanently allow an automatic extension of time for employers to furnish employees with statements about their health insurance coverage, in proposed regulations (REG-109128-21) posted to the IRS website on Monday.

The proposed regulations also would make other changes to requirements under the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148, and incorporate a previous clarification that Medicaid coverage that is limited to COVID-19 testing and diagnostic services provided under the Families First Coronavirus Response Act, P.L. 116-127, does not constitute "minimum essential coverage" as that term is used under the PPACA.

A 30-day extension beyond the statutory deadline of Jan. 31 for providing to employees and other covered individuals the information statements — which generally correspond to a taxpayer copy of Forms 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage, which are also filed with the IRS — has been provided annually since the statements were first required under the PPACA, most recently by Notice 2020-76, which extended the time to furnish 2020 statements to March 2, 2021.

The proposed regulations would provide an automatic extension of time for providing the statements to no more than 30 days after Jan. 31, or the next business day if that extended deadline falls on a weekend or legal holiday. Because this extension is automatic, the proposed regulations would eliminate the requirement in Regs. Sec. 1.6055-1(g)(4)(i)(B)(1) that a reporting entity make a written application to the IRS showing good cause to request an extension of time to furnish the statement.

The proposed regulations would amend Regs. Sec. 1.6055-1 to provide that the IRS will not impose a penalty under Sec. 6722 for failing to furnish Form 1095-B if the employer or other reporting entity posts prominently on its website a statement that individuals can receive their Form 1095-B upon request, with email and physical addresses and a phone number for making the request, and fulfills such requests within 30 days of when they were received. Employers may furnish the statements to employees electronically if the requirements of Regs. Sec. 1.6011-2 are met.

However, the proposed regulations would amend Regs. Sec. 1.6056-1 to not allow an applicable large employer (ALE) to use this alternative method of providing the information to full-time employees who are enrolled in the employer's self-insured plan.

When finalized, these rules will apply for calendar years beginning after Dec. 31, 2021, but reporting entities may choose to apply them for calendar years beginning after Dec. 31, 2020.

Medicaid coverage of COVID-19 services

Regarding Medicaid coverage of COVID-19 testing and diagnostic services, the IRS in Notice 2020-66 provided that the testing and services are not minimum essential coverage for purposes of the Sec. 36B premium tax credit, meaning that an individual who had such Medicaid coverage for any month could be eligible for the premium tax credit for that month, assuming he or she met all other requirements. The proposed regulations would amend Regs. Sec. 1.5000A-2 to that effect. The amended rule, once finalized, will apply for months beginning after Sept. 28, 2020, but taxpayers may rely on the proposed regulations for months beginning after Sept. 28, 2020, and before the rules are finalized.

Paul Bonner ( is a JofA senior editor.

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