The Affordable Care Act requires individuals to have minimum essential coverage (MEC) or pay a tax, unless they qualify for an exemption from the requirement. MEC includes coverage through government programs (such as Medicare or Medicaid), employer coverage that meets certain requirements, individual market coverage, coverage under a grandfathered health plan, and other coverage recognized as MEC by the Departments of Health and Human Services and Treasury. The ACA requires government programs, insurers, and plan sponsors of group health plans that provide MEC coverage to report this coverage to the IRS and provide a statement including the information to covered individuals.
Information regarding MEC coverage is reported by insurers and government programs using form 1095-B and by large self-insured employers using section III of form 1095-C. Generally, the reporting entity for a self-insured health plan is the plan sponsor, which is usually the employer for a single-employer plan. For multiemployer plans the plan sponsor is the association, committee, joint board of trustees or other entity that established and maintain the plan, and for employee organization self-insured plans the plan sponsor is the employee organization. Providers of minimum essential coverage must report
- the name, address and employer identification number or EIN of the reporting entity;
- the name, address, and Taxpayer Identification Number (TIN)—or if a TIN is not available, the birthdate—of the responsible individual (such as the primary insured or employee through whom the coverage is issued) and of each person covered under the policy or program; and
- the months of coverage for each covered individual. If the form is filed by an insurer covering a group health plan, the insurer must also provide the name, address, and EIN of the employer.
NPRM On Minimum Essential Coverage Reporting
On July 29, the Internal Revenue Service released a notice of proposed rulemaking intended to clear up certain issues that have arisen with respect to these reporting requirements. The proposal is very technical with virtually no policy relevance. It simply fills some gaps and clarifies requirements under the current reporting rule.
Under current rules, marketplaces are responsible for reporting coverage under qualified health plans under the 1095-A. Insurers are not responsible for reporting marketplace coverage under the 1095-B. But neither has been responsible for reporting coverage under catastrophic health plans, even though catastrophic coverage is minimum essential coverage. The proposed rule would require insurers to report catastrophic coverage, effective for 2017 coverage, with returns and statements filed in 2018. Insurers could voluntarily report catastrophic coverage for 2015 and may do it again for 2016. The proposed rule would also require government entities that administer Basic Health Plan programs to report coverage under those programs.
Reports filed with the IRS and statements provided to individuals by insurers that cover a group health plan must include the EIN of the employer and the TIN of the responsible individual (if covered by the plan) and of other covered individuals. The proposed rule clarifies that these numbers may be "truncated" on the individual statements, that is the first five of the nine digits can be replaced by Xs or *s for security purposes.
The proposed rule clarifies that reporting of minimum essential coverage is not required if an individual is covered by more than one MEC plan or program provided by the same reporting entity. If an employer provides both self-insured comprehensive coverage and a self-insured HRA for the same months, and both are MEC, the employer need only report on one form of coverage. If, however, an employee is enrolled in his or her employer's HRA and also in another (for example, a spouse's) employer's self-insured coverage, both employers must report.
The proposed rule also provides that reporting is not required for MEC if the MEC is only available if a covered individual is also covered by other MEC for which reporting is required. For example, if an individual is enrolled both in Medicare and in a Medicare Savings program, the Medicare coverage would be reported and the state would not have to report Medicaid coverage through the savings program. A Medicare supplement insurer also is not required to report the coverage since it is supplemental to Medicare, which is MEC. The rule preface notes that Medicaid and CHIP agencies in the United States territories do not need to report coverage since individuals who live in the territories are considered to have MEC.
Requirements For Soliciting TINs
Reporting entities that fail to file timely and complete statements are subject to penalties of $250 per return or statement. These penalties may be waived if the failure to file is due to reasonable cause and not willful neglect. Specifically, a reporting entity is treated as acting in a responsible manner if the its returns and statements fail to include a TIN for a covered individual but the entity has requested the TIN from a responsible individual through an initial solicitation and two subsequent annual solicitations and the TIN was not provided. There is been confusion, however, as to when exactly the initial and subsequent solicitations must be made.
The proposed rule clarifies that the initial solicitation must be made at the time the reporting entity receives a substantially complete application for coverage (including an application to add an individual to coverage) from or on behalf of an individual not already provided coverage. The first annual solicitation must be made on or before the seventy-fifth day after an account is opened or a determination of retroactive coverage is made (or, for accounts already opened, within a reasonable time after July 29, 2016). and the second annual solicitation by December 31 of the following year. A request for a TIN on a renewal application can satisfy the annual solicitation requirement.
The solicitations need only be made to the responsible individual for all individuals covered under the individual's policy, although a TIN solicitation must be made for each new individual added subsequently to a policy. A TIN solicitation made by mail must include a return envelope, but only one return envelope need be sent per policy. Employers may make the TIN solicitation on behalf of insurers, but the insurer is still responsible if the employer fails to do so. TINs may be solicited electronically if certain requirements are met.
Coordination Between Marketplaces, State Medicaid And CHIP Agencies
The Affordable Care Act requires a "no wrong door" application process through which individuals can apply for marketplace coverage with advance premium tax credits and cost-sharing reduction payments, or Medicaid and CHIP coverage, either through the marketplace or a state Medicaid and CHIP agency using a single streamlined application. The individual is then to be routed to the appropriate program for which they are eligible.
Coordination between the federal and state marketplaces and the state Medicaid and CHIP agencies has not been easy, but the kinks are being worked out. On July 25, 2016, the Center for Medicaid and CHIP Services of CMS released an informational bulletin describing the current status of eligibility coordination.
Under current rules, the federally facilitated marketplace (FFM) may either, at a state's option, determine or assess the eligibility of applicants for Medicaid and CHIP. When the FFM determines or assesses an individual to be eligible for Medicaid or CHIP, the FFM transfers all information that the individual provided on the application to the state Medicaid or CHIP agency by account transfer, along with an indication of whether the information was verified with federal agencies through the Federal Data Services Hub. The account transfer will also identify individuals who should be screened for eligibility on a basis other than their modified adjusted gross income (MAGI) and, in assessment states, whether the individual has requested a full eligibility determination by the state.
If a state is one of the eight determination states, the state accepts the FFM's final determination for MAGI-based Medicaid or CHIP eligibility. If the FFM identifies a data inconsistency with respect to an individual or determines that no information is available through the Hub, the application is transferred to the state which enrolls the individual in Medicaid or CHIP and proceeds to collect additional information as necessary to verify eligibility.
If a state is one of the twenty-nine assessment states, the state agency accepts the account transfer and any finding of the FFM with respect to an eligibility criterion if it was made in accordance with policies and procedures applied by the agency or approved by the state in an agreement between it and the FFM. The state must promptly determine eligibility based on that information and any further information it collects, but cannot request individuals to resubmit information already provided to the FFM and included in the account transfer. Individuals not assessed as Medicaid eligible can also request a transfer for a Medicaid eligibility determination.
When consumers apply to a state Medicaid or CHIP agency and are determined to be ineligible (or subject to a CHIP waiting period), the agency must assess the individual's potential eligibility for other insurance affordability programs and transfer the application to the FFM, including all information collected or generated in assessing the individual's Medicaid or CHIP eligibility. If the agency determines an individual to be ineligible for MAGI-based Medicaid, the agency must transfer the individual's account to the FFM while it proceeds to determine eligibility on another basis (such as disability) and then notify the individual and the FFM when it reaches a final determination. If an agency determines an individual to no longer be eligible for Medicaid during a renewal determination, it must transfer the account to the FFM before terminating coverage.
A New Approach
Under a new procedure provided by the informational bulletin, state Medicaid and CHIP agencies can simply transfer anyone determined ineligible for Medicaid or CHIP—for reasons other than procedural issues (such as failure to respond to requests for information) or failure to attest citizenship or lawful presence—to the FFM for the FFM to determine eligibility, without first assessing potential eligibility. This would include families where the children are eligible for CHIP but the parents not eligible for Medicaid, applicants ineligible for MAGI-based coverage but being assessed for eligibility on a non-MAGI basis, children ineligible for CHIP during a CHIP waiting period, or applicants lawfully present in the United States but ineligible for Medicaid or CHIP based on immigration status. States should also transfer accounts, for an FFM eligibility determination, of individuals enrolled in limited Medicaid coverage (such as family-planning-services-only coverage) that is not considered minimum essential coverage.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2auk0p6
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