Information Reporting for Affordable Insurance Exchanges, 26113-26120 [2014-10419]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 79, Number 88 (Wednesday, May 7, 2014)]
[Rules and Regulations]
[Pages 26113-26120]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10419]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9663]
RIN 1545-BL42


Information Reporting for Affordable Insurance Exchanges

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations relating to 
requirements for Affordable Insurance Exchanges (Exchanges) to report 
information relating to the health insurance premium tax credit enacted 
by the Patient Protection and Affordable Care Act and the Health Care 
and Education Reconciliation Act of 2010. These final regulations apply 
to Exchanges that make qualified health plans available to individuals.

DATES: Effective date: These regulations are effective on May 7, 2014.
    Applicability Dates: For dates of applicability, see Sec.  1.36B-
1(o).

FOR FURTHER INFORMATION CONTACT: Shareen S. Pflanz or Arvind 
Ravichandran, (202) 317-4718 (not a toll-free call).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in these regulations has 
been reviewed and approved by the Office of Management and Budget in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) 
under control number 1545-2232.
    The collection of information in these final regulations is in 
Sec.  1.36B-5 and will be reported on Form 1095-A. The collection of 
information is necessary to compute the premium tax credit and to 
reconcile the amount of the premium tax credit with advance payments of 
the premium tax credit (advance credit payments) made under section 
1412 of the Patient Protection and Affordable Care Act (42 U.S.C. 
18082). The collection of information is needed for compliance with the 
provisions of section 36B(f)(3) of the Internal Revenue Code (Code). 
The likely respondents are Exchanges established under section 1311 or 
1321 of the Patient Protection and Affordable Care Act (42 U.S.C. 13031 
or 42 U.S.C. 18041).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control

[[Page 26114]]

number assigned by the Office of Management and Budget.
    The estimated total annual reporting burden is 10,050 hours. The 
estimated annual burden per respondent is 670 hours. The estimated 
number of respondents is 15.
    Comments concerning the accuracy of this burden estimate and 
suggestions for reducing this burden should be sent to the Internal 
Revenue Service, Attn: IRS Reports Clearance Officer SE:W:CAR:MP:TM:S, 
Washington, DC 20224, and to the Office of Management and Budget, Attn: 
Desk Officer for the Department of the Treasury, Office of Information 
and Regulatory Affairs, Washington, DC 20503.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
return information are confidential, as required by section 6103.

Background

    This document contains final regulations that amend Sec.  1.36B-5 
of the Income Tax Regulations (26 CFR part 1), providing detailed rules 
for information reporting by Exchanges on enrollments in qualified 
health plans. Section 36B(f)(3) directs Exchanges to report to the IRS 
and to taxpayers certain information necessary to reconcile the premium 
tax credit with advance credit payments and to administer the premium 
tax credit generally.
    On July 2, 2013, a notice of proposed rulemaking (REG-140789-12) 
was published in the Federal Register (78 FR 39644). Written comments 
responding to the proposed regulations were received and considered. 
The comments are available for public inspection at www.regulations.gov 
or on request. No public hearing was requested or held. After 
consideration of all the comments, the proposed regulations are adopted 
as amended by this Treasury decision.

Explanation of Provisions and Summary of Comments

1. Individuals Subject To Exchange Reporting

    The proposed regulations required Exchanges to report information 
for all individuals who enroll in a qualified health plan. The proposed 
regulations used the terms taxpayer and responsible adult to describe, 
respectively, an individual who applies to enroll one or more members 
of the individual's family in a qualified health plan and who requests 
advance credit payments and to describe an individual who enrolls one 
or more members of the individual's family and does not request advance 
credit payments.
    A commenter suggested that these terms do not accommodate 
nontraditional family structures because the definitions assume that 
the individual who claims a dependent also enrolled the dependent in 
coverage. Commenters also felt the terms were confusing.
    The terms taxpayer and responsible adult in the proposed 
regulations were intended to describe the individual who is expected to 
file an income tax return for the year of coverage for the enrolling 
family. Whether that individual is the one who completes the enrollment 
application is not significant. Accordingly, the final regulations 
clarify that these terms describe the individual who is expected to 
file an income tax return for the year of coverage with respect to 
individuals enrolling in a qualified health plan.
    To avoid confusion with other uses of the term taxpayer, the final 
regulations instead use the term tax filer to identify individuals on 
behalf of whose families advance credit payments are made. This term is 
used in regulations at 45 CFR 155.300 to describe a taxpayer and thus 
is more familiar to Exchanges.
    The final regulations clarify that if more than one tax family 
enrolls in the same qualified health plan there is a tax filer or 
responsible adult for each family and that the tax filer or responsible 
adult may or may not enroll in coverage.
    The final regulations clarify the information required to be 
reported for qualified health plan enrollments for which advance credit 
payments are made or not made. Because the primary difference in the 
information reported relates to whether or not advance credit payments 
are made on behalf of an individual, the final regulations distinguish 
the reporting categories based on whether or not advance credit 
payments are made on behalf of an individual, rather than on whether an 
individual requests advance credit payments.

2. Information Required To Be Reported

a. Specific Data Elements
    The proposed regulations required Exchanges to report information 
concerning all individuals enrolled in qualified health plans. For each 
plan, the information includes the name, address, and taxpayer 
identification numbers (TINs), or dates of birth if a TIN is not 
available, for each individual covered under the plan; applicable 
benchmark plan premiums or the amount that would be the benchmark 
premium that would apply to all enrolled individuals (unless that 
information is made available to individuals through an alternative 
method that they can access at tax return filing); the amount of the 
premium for the qualified health plan the individuals enroll in; the 
name of the qualified health plan issuer and the issuer's employer 
identification number (EIN); the qualified health plan policy number; 
the Exchange's unique identification number; and the unique number that 
identifies the family's specific account to enable data association 
from month to month. For individuals enrolled in a plan for which 
advance credit payments were requested, the proposed regulations 
required Exchanges to report the amount of advance credit payments, 
whether the individuals enrolled are the taxpayer's dependents, and 
certain information concerning employers.
    The final regulations generally require Exchanges to report the 
data elements identified in the proposed regulations but make several 
minor changes and clarifications in response to comments and based on 
what is needed to determine the premium tax credit.
    Commenters requested that the final regulations omit certain data 
elements from the reporting requirements. A commenter expressed concern 
that it would not be able to report accurate information about the 
amount of advance credit payments. Another commenter questioned the 
need to report the family's specific account number. Other commenters 
advised that issuers often do not assign a policy number and that HHS 
regulations do not require issuers to report policy numbers to 
Exchanges.
    The final regulations require Exchanges to report the policy 
identification number assigned by the Exchange instead of a policy 
number created by an issuer and clarify that the ``specific account 
number'' is the unique identifying number the Exchange uses to report 
data that enables the IRS to associate the data with the proper 
account. These data elements, including the amount of advance credit 
payments and the unique data association number, are available to 
Exchanges and essential for the IRS to properly administer the premium 
tax credit.
    The proposed regulations required Exchanges to report whether an 
individual enrolled in a qualified health plan by a taxpayer is the 
taxpayer's dependent. A commenter suggested that Exchanges should not 
be required to report this information because Exchanges will obtain 
this information

[[Page 26115]]

from the IRS as part of the verification of an applicant's information. 
The final regulations do not adopt this comment because information the 
IRS provides as part of the verification process is from the taxpayer's 
most recently filed tax return, which may be two years old. 
Accordingly, the final regulations retain the rule in the proposed 
regulations that, for plans for which advance credit payments are made, 
Exchanges will report which covered individuals a tax filer represented 
to the Exchange that he or she would claim as a dependent for the 
coverage year. This information is necessary because advance credit 
payments are based, in part, on information concerning the individuals 
whom a tax filer expects to claim as dependents for the taxable year 
for which the advance credit payments are made.
    In addition, the final regulations make several minor changes to 
the data elements reported based on what is needed to determine the 
premium tax credit. The proposed regulations provided that Exchanges 
must report the issuer's EIN on both the annual statement and the 
monthly statements. The final regulations provide that Exchanges will 
report the issuer's EIN on a monthly basis only, as this information is 
not needed on the annual report. The proposed regulations provided that 
Exchanges must report an address for a taxpayer's spouse. The final 
regulations omit this information, as it is unnecessary. Finally, the 
proposed regulations provided that Exchanges must report the dates of 
each individual's coverage under the qualified health plan. The final 
regulations provide that Exchanges also must report the start and end 
dates for the qualified health plan itself, as this information may be 
needed to determine the amount of the premium tax credit.
b. Information on Applicable Benchmark Premium
    The proposed regulations required Exchanges to report to the IRS 
information concerning the monthly premium for the applicable benchmark 
plan. For qualified health plans for which advance credit payments were 
approved, the proposed regulations provided that Exchanges must report 
the monthly premium for the applicable benchmark plan used to compute 
advance credit payments. For plans for which advance credit payments 
were not requested or were not approved, the proposed regulations 
required Exchanges to report the premium for the applicable benchmark 
plan that would apply to the individuals enrolled in a qualified health 
plan, unless the information is made available through an alternative 
method. Commenters requested clarification on the distinction between 
the benchmark premium information reported in each case.
    The proposed and final regulations require Exchanges to report the 
monthly premium for the applicable benchmark plan that applies to the 
coverage family (the members of the family enrolling and eligible for a 
premium tax credit subsidy) that is used to compute advance credit 
payments. If no advance credit payments are made, Exchanges may not 
determine which individuals enrolled would be part of the coverage 
family and the applicable benchmark premium that would apply to that 
coverage family. Nonetheless, the final regulations, like the proposed 
regulations, require reporting the benchmark premium that would apply 
if the coverage family included everyone covered under the plan because 
individuals for whom advance credit payments are not made may claim the 
premium tax credit on the tax return for the year of coverage and must 
know the premium for the applicable benchmark plan to compute the 
amount of the credit. In lieu of reporting this benchmark premium, 
however, Exchanges may provide a reasonable method for taxpayers to use 
to determine at the time of filing the tax return the premium for the 
applicable benchmark plan that applies to a coverage family.
c. Verification of Employment Information
    For individuals enrolled in a qualified health plan for which 
advance credit payments were requested, the proposed regulations 
required Exchanges to report information on employment, including the 
name, address, and EIN of each employer of each enrolled individual and 
whether the employer offered minimum essential coverage to the extent 
provided to the Exchange. A commenter requested confirmation that the 
requirement to report employment information does not obligate the 
Exchange to request or verify a taxpayer's employment information on a 
monthly basis or otherwise ensure the accuracy of the information 
supplied.
    The proposed and final regulations provide that Exchanges must 
report employment information ``to the extent this information is 
provided to the Exchange.'' Thus, Exchanges must report only employment 
information provided to the Exchange and are not obligated to verify 
the accuracy, except to the extent required by Department of Health and 
Human Services regulations. However, if during the year an enrollee 
provides updated or corrected employment information to an Exchange, 
the Exchange must report that information to the IRS in its next 
monthly report. Exchanges must submit corrected monthly reports for the 
coverage year by April 15th following the year of coverage.
d. Annual Versus Monthly Reporting
    The proposed regulations required Exchanges to report certain 
information to the IRS annually by January 31 of the year following the 
calendar year of coverage. Exchanges must report certain information on 
a monthly basis by the 15th of the month for the previous month and all 
previous months in that calendar year. A commenter requested that the 
final regulations delete the amount of the advance credit payments made 
on a taxpayer's behalf each month from the annual report to the IRS. 
The commenter suggested that the IRS already will have this information 
from monthly reports.
    The final regulations do not adopt this comment. The information 
provided on the annual report is identical to the information reported 
on the statement to individuals, discussed later in this preamble. It 
summarizes for the year the information submitted monthly that 
taxpayers claiming the premium tax credit must have to properly claim 
the credit on their returns and to reconcile the premium tax credit 
with advance credit payments. Accordingly, the final regulations do not 
omit this information from the annual report.
e. Family Members With Enrollments or Exemptions at Different Exchanges
    A commenter asked how Exchanges will identify the members of a tax 
household if the members enroll in, or receive minimum essential 
coverage exemptions from, different Exchanges. The final regulations 
clarify that an Exchange will report only information on enrollments 
and exemptions at that Exchange. The IRS will associate information 
reports from multiple Exchanges with the appropriate tax return.
f. Multiple Families Enrolled in One Qualified Health Plan
    Under Sec.  1.36B-3(h), if more than one tax family enrolls in a 
single policy, each applicable taxpayer covered by the plan may claim a 
premium tax credit, computed using the applicable percentage, household 
income, and benchmark plan that applies to that taxpayer. Under these 
circumstances, each applicable taxpayer must have the

[[Page 26116]]

information specific to that tax family to claim the premium tax credit 
on the income tax return. Accordingly, the final regulations clarify 
that Exchanges will report the specified information for each family 
enrolled in a qualified health plan, whether receiving advance credit 
payments or not, including multiple families submitting a single 
application or enrolled in a single qualified health plan.

3. Information Reporting on the SHOP

    Commenters asked whether Exchanges must report information for 
taxpayers obtaining health care coverage through a Small Business 
Health Options Program (SHOP) Exchange. The final regulations clarify 
that section 36B(f)(3) and these regulations do not require the 
reporting of information for taxpayers enrolling in health care 
coverage through a SHOP Exchange. However, under regulations at 45 CFR 
155.720, SHOP Exchanges will report to the IRS information concerning 
employer participation, employer contribution, and employee enrollment 
in a time and format to be determined by the Department of Health and 
Human Services.

4. Time for Reporting

    The proposed regulations required Exchanges to report certain 
information to the IRS on or before the 15th day following each month 
of coverage (monthly reporting), commencing in February, 2014. 
Commenters requested that the IRS delay the initial monthly report 
until June or July, 2014, to allow Exchanges sufficient time to develop 
the systems and processes necessary to support the monthly reporting 
requirements. In response to these comments, the final regulations 
provide that the Commissioner may establish an initial monthly 
reporting date in other guidance, see Sec.  601.601(d), but no earlier 
than June 15, 2014. The report must include cumulative information for 
enrollments for the period January 1 through the end of the month 
preceding the initial monthly reporting date. For example, an initial 
report due June 15, 2014, must include cumulative information for the 
period January 1 to May 31, 2014.

5. Statements Furnished to Individuals

a. Individual Receiving the Statement
    The proposed regulations directed Exchanges to furnish to each 
individual who enrolled one or more family members in a qualified 
health plan through the Exchange a written statement that includes the 
information the Exchange must report to the IRS annually. Exchanges may 
use Form 1095-A for the statement and must furnish the statement on or 
before January 31 of the year following the calendar year of coverage.
    The proposed regulations required that an Exchange furnish a 
statement only to the individual who enrolls one or more family members 
through the Exchange. Several commenters indicated that Exchange 
regulations allow an individual applying for coverage to designate 
another person as an authorized representative for dealing with the 
Exchange on the individual's behalf. They requested that the final 
regulations recognize an individual's authorization of a third person 
as a representative for Exchange purposes as sufficient authority to 
allow Exchanges to provide the statement required under these 
regulations to the authorized representative, or that the final 
regulations require Exchanges to do so. Other commenters asked that the 
final regulations accommodate nontraditional family arrangements by 
allowing Exchanges to provide statements to individuals such as a 
grandparent or noncustodial parent who may claim a child as a dependent 
and would require the information on the statement to claim the premium 
tax credit for that dependent's coverage.
    The final regulations do not prohibit Exchanges from providing 
statements to third parties if permitted under other law. However, 
section 36B(f)(3) does not authorize the IRS to require Exchanges to do 
so. In addition, the IRS is not able to provide statements to third 
parties based on authorization to an Exchange because information 
obtained pursuant to section 36B(f)(3) is return information and, under 
section 6103, return information may be disclosed only under express 
authority of the Code.
    Commenters recommended significantly limiting the information 
reported on the statement to protect victims of domestic violence and 
children they enroll in coverage. The final regulations require 
Exchanges to send statements only to the tax filer or responsible adult 
whom the Exchange identifies. This person is likely to be the 
individual enrolling the child in coverage. A person claiming an 
individual as a dependent who is not identified as a tax filer or 
responsible adult will not receive a statement reporting the 
dependent's coverage. Therefore, if a victim of domestic abuse enrolls, 
or enrolls a child, in coverage as a tax filer or responsible adult, 
the Exchange will send a statement only to that person, even if another 
taxpayer claims the child as a dependent. In addition, the statement 
will include an address only for the person to whom it is mailed. 
Accordingly, on this issue, the final regulations adopt the proposed 
regulations without change.
b. Electronic Delivery of Statements to Recipients
    The proposed regulations provided that statements to individuals 
may be sent electronically only to individuals who affirmatively 
consent to the electronic format. Commenters requested that the final 
regulations permit electronic delivery of statements, paper delivery of 
statements, or both. Other commenters stated that the electronic 
statement rules are too complex and should be simplified.
    The final regulations do not prohibit an Exchange from sending both 
paper and electronic statements to an individual. However, the final 
regulations retain the electronic statement procedures in the proposed 
regulations, which provide for affirmative consent to receive 
statements electronically, and clarify that the consent requirement is 
not satisfied if the recipient withdraws the consent. These procedures 
are the same as long-standing procedures that also apply in other 
information reporting contexts. The procedures are intended to ensure 
that all individuals, including those who do not have access to or are 
not fully comfortable with electronic technology, are able to access 
information necessary to prepare their tax returns.
    The proposed regulations provided that if an Exchange furnishes a 
statement to an individual by mail, the statement must be sent to the 
individual's last known permanent address, or if no permanent address 
is known, to a temporary address. A commenter requested more definitive 
guidance on what constitutes the proper furnishing of a statement to an 
individual when the individual does not receive the statement, for 
example if the statement is returned undelivered. The commenter 
suggested that the final regulations adopt a rule that applies to other 
information reporting requirements that a first class mailing 
discharges the reporting entity's obligation to furnish a statement. To 
provide more certainty, the final regulations include this rule, which 
is consistent with other information reporting requirements.

Effective/Applicability Date

    These regulations apply to taxable years ending after December 31, 
2013.

[[Page 26117]]

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. Therefore, a regulatory 
assessment is not required. It has also been determined that section 
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does 
not apply to these regulations, and, because the regulations do not 
impose a collection of information requirement on small entities, the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. 
Pursuant to section 7805(f) of the Code, the notice of proposed 
rulemaking preceding these regulations were submitted to the Chief 
Counsel for Advocacy of the Small Business Administration for comment 
on its impact on small business. The Small Business Administration did 
not submit comments.

Drafting Information

    The principal authors of these final regulations are Shareen S. 
Pflanz and Stephen J. Toomey of the Office of Associate Chief Counsel 
(Income Tax and Accounting). However, other personnel from the IRS and 
the Treasury Department participated in the development of the 
regulations.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 1 is amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by adding 
entries in numerical order to read in part as follows:

    Authority:  26 U.S.C. 7805 * * *

    Section 1.36B-0 also issued under 26 U.S.C. 36B(g). Section 
1.36B-5 also issued under 26 U.S.C. 36B(g).


0
Par. 2. Section 1.36B-0 is amended by revising the entries for Sec.  
1.36B-5 to read as follows:


Sec.  1.36B-0  Table of contents.

* * * * *


Sec.  1.36B-5  Information reporting by Exchanges.

    (a) In general.
    (b) Individual filing a return.
    (c) Information required to be reported.
    (1) Information reported annually.
    (2) Information reported monthly.
    (3) Special rules for information reported.
    (i) Multiple families enrolled in a single qualified health plan.
    (ii) Alternative to reporting applicable benchmark plan.
    (4) Exemptions.
    (d) Time for reporting.
    (1) Annual reporting.
    (2) Monthly reporting.
    (i) In general.
    (ii) Initial monthly reporting in 2014.
    (3) Corrections to information reported.
    (e) Electronic reporting.
    (f) Annual statement to be furnished to individuals.
    (1) In general.
    (2) Form of statements.
    (3) Time and manner for furnishing statements.
    (g) Electronic furnishing of statements.
    (1) In general.
    (2) Consent.
    (i) In general.
    (ii) Withdrawal of consent.
    (iii) Change in hardware or software requirements.
    (iv) Examples.
    (3) Required disclosures.
    (i) In general.
    (ii) Paper statement.
    (iii) Scope and duration of consent.
    (iv) Post-consent request for a paper statement.
    (v) Withdrawal of consent.
    (vi) Notice of termination.
    (vii) Updating information.
    (viii) Hardware and software requirements.
    (4) Format.
    (5) Notice.
    (i) In general.
    (ii) Undeliverable electronic address.
    (iii) Corrected statement.
    (6) Access period.
    (7) Paper statements after withdrawal of consent.

0
Par. 3. Section 1.36B-5 is revised to read as follows:


Sec.  1.36B-5  Information reporting by Exchanges.

    (a) In general. An Exchange must report to the Internal Revenue 
Service (IRS) information required by section 36B(f)(3) and this 
section relating to individual market qualified health plans in which 
individuals enroll through the Exchange. No reporting is required under 
this section for enrollment in plans through the Small Business Health 
Options Exchange.
    (b) Individual filing a return. For purposes of this section, the 
terms tax filer and responsible adult describe the individual who is 
expected to be the taxpayer filing an income tax return for the year of 
coverage with respect to individuals enrolling in a qualified health 
plan. A tax filer is an individual on behalf of whom advance payments 
of the premium tax credit are made. A responsible adult is an 
individual on behalf of whom advance payments of the premium tax credit 
are not made. An individual may be a tax filer or responsible adult 
whether or not enrolled in coverage. If more than one family (within 
the meaning of Sec.  1.36B-1(d)) enrolls in the same qualified health 
plan, there is a tax filer or responsible adult for each family.
    (c) Information required to be reported--(1) Information reported 
annually. An Exchange must report to the IRS the following information 
for each qualified health plan--
    (i) The name, address, and taxpayer identification number (TIN), or 
date of birth if a TIN is not available, of the tax filer or 
responsible adult;
    (ii) The name and TIN, or date of birth if a TIN is not available, 
of a tax filer's spouse;
    (iii) The amount of the advance credit payments paid for coverage 
under the plan each month;
    (iv) For plans for which advance credit payments are made, the 
premium (excluding the premium allocated to benefits in excess of 
essential health benefits, see Sec.  1.36B-3(j)) for the applicable 
benchmark plan for purposes of computing advance credit payments;
    (v) Except as provided in paragraph (c)(3)(ii) of this section, for 
plans for which advance credit payments are not made, the premium 
(excluding the premium allocated to benefits in excess of essential 
health benefits, see Sec.  1.36B-3(j)) for the applicable benchmark 
plan that would apply to all individuals enrolled in the qualified 
health plan if advance credit payments were made for the coverage;
    (vi) The name and TIN, or date of birth if a TIN is not available, 
and dates of coverage for each individual covered under the plan;
    (vii) The coverage start and end dates of the qualified health 
plan;
    (viii) The monthly premium for the plan in which the individuals 
enroll, however--
    (A) The premium allocated to benefits in excess of essential health 
benefits is excluded, see Sec.  1.36B-3(j);
    (B) The premium for a stand-alone dental plan allocated to 
pediatric dental benefits is added, see Sec.  1.36B-3(k), but if a 
family (within the meaning of Sec.  1.36B-1(d)) is enrolled in more 
than one qualified health plan, the pediatric dental premium is added 
to the

[[Page 26118]]

premium for only one qualified health plan; and
    (C) The amount is not reduced for advance credit payments;
    (ix) The name of the qualified health plan issuer;
    (x) The Exchange-assigned policy identification number;
    (xi) The Exchange's unique identifier; and
    (xii) Any other information specified by forms or instructions or 
in published guidance, see Sec.  601.601(d) of this chapter.
    (2) Information reported monthly. For each calendar month, an 
Exchange must report to the IRS for each qualified health plan, the 
information described in paragraph (c)(1) of this section and the 
following information--
    (i) For plans for which advance credit payments are made--
    (A) The names, TINs, or dates of birth if no TIN is available, of 
the individuals enrolled in the qualified health plan who are expected 
to be the tax filer's dependent; and
    (B) Information on employment (to the extent this information is 
provided to the Exchange) consisting of--
    (1) The name, address, and EIN of each employer of the tax filer, 
the tax filer's spouse, and each individual covered by the plan; and
    (2) An indication of whether an employer offered affordable minimum 
essential coverage that provided minimum value, and, if so, the amount 
of the employee's required contribution for self-only coverage;
    (ii) The unique identifying number the Exchange uses to report data 
that enables the IRS to associate the data with the proper account from 
month to month;
    (iii) The issuer's employer identification number (EIN); and
    (iv) Any other information specified by forms or instructions or in 
published guidance, see Sec.  601.601(d) of this chapter.
    (3) Special rules for information reported--(i) Multiple families 
enrolled in a single qualified health plan. An Exchange must report the 
information specified in paragraphs (c)(1) and (c)(2) of this section 
for each family (within the meaning of Sec.  1.36B-1(d)) enrolled in a 
qualified health plan, including families submitting a single 
application or enrolled in a single qualified health plan.
    (ii) Alternative to reporting applicable benchmark plan. An 
Exchange satisfies the requirement in paragraph (c)(1)(v) of this 
section if, on or before January 1 of each year after 2014, the 
Exchange provides a reasonable method that a responsible adult may use 
to determine the premium (after adjusting for benefits in excess of 
essential health benefits) for the applicable benchmark plan that 
applies to the responsible adult's coverage family for the prior 
calendar year for purposes of determining the premium tax credit on the 
tax return.
    (4) Exemptions. For each calendar month, an Exchange must report to 
the IRS the name and TIN, or date of birth if a TIN is not available, 
of each individual for whom the Exchange has granted an exemption from 
coverage under section 5000A(e) and the related regulations, the months 
for which the exemption is in effect, and the exemption certificate 
number.
    (d) Time for reporting--(1) Annual reporting. An Exchange must 
submit to the IRS the annual report required under paragraph (c)(1) of 
this section on or before January 31 of the year following the calendar 
year of coverage.
    (2) Monthly reporting--(i) In general. Except as provided in 
paragraph (d)(2)(ii) of this section, an Exchange must submit to the 
IRS the monthly reports required under paragraphs (c)(2) and (c)(4) of 
this section on or before the 15th day following each month of 
coverage.
    (ii) Initial monthly reporting in 2014. Exchanges must submit to 
the IRS the initial monthly report required under paragraphs (c)(2) and 
(c)(4) of this section on a date that the Commissioner may establish in 
other guidance, see Sec.  601.601(d) of this section, but no earlier 
than June 15, 2014. The initial report must include cumulative 
information for enrollments for the period January 1, 2014, through the 
last day of the month preceding the month for submitting the initial 
monthly report.
    (3) Corrections to information reported. In general, an Exchange 
must correct erroneous or outdated monthly-reported information in the 
next monthly report. If the information must be corrected after the 
final monthly submission on January 15 following the coverage year, 
corrections should be submitted by the 15th day of the month following 
the month in which the incorrect information is identified. However, no 
monthly report correction is permitted after April 15 following the 
year of coverage. Errors on the annual report must be corrected and 
reported to the IRS and to the individual recipient identified in 
paragraph (f) of this section as soon as possible.
    (e) Electronic reporting. An Exchange must submit the reports to 
the IRS required under this section in electronic format. The 
information reported monthly will be submitted to the IRS through the 
Department of Health and Human Services.
    (f) Annual statement to be furnished to individuals--(1) In 
general. An Exchange must furnish to each tax filer or responsible 
adult (the recipient for purposes of paragraphs (f) and (g) of this 
section) a written statement showing--
    (i) The name and address of the recipient and
    (ii) The information described in paragraph (c)(1) of this section 
for the previous calendar year.
    (2) Form of statements. A statement required under this paragraph 
(f) may be made by furnishing to the recipient identified in the annual 
report either a copy of the report filed with the IRS or a substitute 
statement. A substitute statement must include the information required 
to be shown on the report filed with the IRS and must comply with 
requirements in published guidance (see Sec.  601.601(d)(2) of this 
chapter) relating to substitute statements. A reporting entity may use 
an IRS truncated taxpayer identification number as the identification 
number for an individual in lieu of the identification number appearing 
on the corresponding information report filed with the IRS.
    (3) Time and manner for furnishing statements. An Exchange must 
furnish the statements required under this paragraph (f) on or before 
January 31 of the year following the calendar year of coverage. If 
mailed, the statement must be sent to the recipient's last known 
permanent address or, if no permanent address is known, to the 
recipient's temporary address. For purposes of this paragraph (f)(3), 
an Exchange's first class mailing to the last known permanent address, 
or if no permanent address is known, the temporary address, discharges 
the Exchange's requirement to furnish the statement. An Exchange may 
furnish the statement electronically in accordance with paragraph (g) 
of this section.
    (g) Electronic furnishing of statements--(1) In general. An 
Exchange required to furnish a statement under paragraph (f) of this 
section may furnish the statement to the recipient in an electronic 
format in lieu of a paper format. An Exchange that meets the 
requirements of paragraphs (g)(2) through (g)(7) of this section is 
treated as furnishing the statement in a timely manner.
    (2) Consent--(i) In general. A recipient must have affirmatively 
consented to receive the statement in an electronic format. The consent 
may be made electronically in any manner that reasonably demonstrates 
that the recipient is able to access the statement in the electronic 
format in which it will

[[Page 26119]]

be furnished. Alternatively, the consent may be made in a paper 
document that is confirmed electronically.
    (ii) Withdrawal of consent. The consent requirement of this 
paragraph (g)(2) is not satisfied if the recipient withdraws the 
consent and the withdrawal takes effect before the statement is 
furnished. An Exchange may provide that the withdrawal of consent takes 
effect either on the date the Exchange receives it or on another date 
no more than 60 days later. The Exchange may provide that a request by 
the recipient for a paper statement will be treated as a withdrawal of 
consent to receive the statement in an electronic format. If the 
Exchange furnishes a statement after the withdrawal of consent takes 
effect, the recipient has not consented to receive the statement in 
electronic format.
    (iii) Change in hardware or software requirements. If a change in 
the hardware or software required to access the statement creates a 
material risk that a recipient will not be able to access a statement, 
an Exchange must, prior to changing the hardware or software, notify 
the recipient. The notice must describe the revised hardware and 
software required to access the statement and inform the recipient that 
a new consent to receive the statement in the revised electronic format 
must be provided to the Exchange. After implementing the revised 
hardware and software, the Exchange must obtain a new consent or 
confirmation of consent from the recipient to receive the statement 
electronically.
    (iv) Examples. The following examples illustrate the rules of this 
paragraph (g)(2):

    Example 1.  Furnisher F sends Recipient R a letter stating that 
R may consent to receive the statement required under section 36B 
electronically on a Web site instead of in a paper format. The 
letter contains instructions explaining how to consent to receive 
the statement electronically by accessing the Web site, downloading 
and completing the consent document, and emailing the completed 
consent to F. The consent document posted on the Web site uses the 
same electronic format that F will use for the electronically 
furnished statement. R reads the instructions and submits the 
consent in the manner provided in the instructions. R has consented 
to receive the statement required under section 36B electronically 
in the manner described in paragraph (g)(2)(i) of this section.
    Example 2.  Furnisher F sends Recipient R an email stating that 
R may consent to receive the statement required under section 36B 
electronically instead of in a paper format. The email contains an 
attachment instructing R how to consent to receive the statement 
required under section 36B electronically. The email attachment uses 
the same electronic format that F will use for the electronically 
furnished statement. R opens the attachment, reads the instructions, 
and submits the consent in the manner provided in the instructions. 
R has consented to receive the statement required under section 36B 
electronically in the manner described in paragraph (g)(2)(i) of 
this section.
    Example 3.  Furnisher F posts a notice on its Web site stating 
that Recipient R may receive the statement required under section 
36B electronically instead of in a paper format. The Web site 
contains instructions on how R may access a secure Web page and 
consent to receive the statements electronically. R accesses the 
secure Web page and follows the instructions for giving consent. R 
has consented to receive the statement required under section 36B 
electronically in the manner described in paragraph (g)(2)(i) of 
this section.

    (3) Required disclosures--(i) In general. Prior to, or at the time 
of, a recipient's consent, an Exchange must provide to the recipient a 
clear and conspicuous disclosure statement containing each of the 
disclosures described in paragraphs (g)(3)(ii) through (g)(3)(viii) of 
this section.
    (ii) Paper statement. An Exchange must inform the recipient that 
the statement will be furnished on paper if the recipient does not 
consent to receive it electronically.
    (iii) Scope and duration of consent. An Exchange must inform the 
recipient of the scope and duration of the consent. For example, the 
Exchange must inform the recipient whether the consent applies to each 
statement required to be furnished after the consent is given until it 
is withdrawn or only to the first statement required to be furnished 
following the consent.
    (iv) Post-consent request for a paper statement. An Exchange must 
inform the recipient of any procedure for obtaining a paper copy of the 
recipient's statement after giving the consent described in paragraph 
(g)(2)(i) of this section and whether a request for a paper statement 
will be treated as a withdrawal of consent.
    (v) Withdrawal of consent. An Exchange must inform the recipient 
that--
    (A) The recipient may withdraw consent by writing (electronically 
or on paper) to the person or department whose name, mailing address, 
telephone number, and email address is provided in the disclosure 
statement;
    (B) An Exchange will confirm the withdrawal and the date on which 
it takes effect in writing (either electronically or on paper); and
    (C) A withdrawal of consent does not apply to a statement that was 
furnished electronically in the manner described in this paragraph (g) 
before the date on which the withdrawal of consent takes effect.
    (vi) Notice of termination. An Exchange must inform the recipient 
of the conditions under which the Exchange will cease furnishing 
statements electronically to the recipient.
    (vii) Updating information. An Exchange must inform the recipient 
of the procedures for updating the information needed to contact the 
recipient and notify the recipient of any change in the Exchange's 
contact information.
    (viii) Hardware and software requirements. An Exchange must provide 
the recipient with a description of the hardware and software required 
to access, print, and retain the statement, and the date when the 
statement will no longer be available on the Web site. The Exchange 
must advise the recipient that the statement may be required to be 
printed and attached to a Federal, State, or local income tax return.
    (4) Format. The electronic version of the statement must contain 
all required information and comply with applicable published guidance 
(see Sec.  601.601(d) of this chapter) relating to substitute 
statements to recipients.
    (5) Notice--(i) In general. If a statement is furnished on a Web 
site, the Exchange must notify the recipient. The notice may be 
delivered by mail, electronic mail, or in person. The notice must 
provide instructions on how to access and print the statement and 
include the following statement in capital letters, ``IMPORTANT TAX 
RETURN DOCUMENT AVAILABLE.'' If the notice is provided by electronic 
mail, this statement must be on the subject line of the electronic 
mail.
    (ii) Undeliverable electronic address. If an electronic notice 
described in paragraph (g)(5)(i) of this section is returned as 
undeliverable, and the Exchange cannot obtain the correct electronic 
address from the Exchange's records or from the recipient, the Exchange 
must furnish the notice by mail or in person within 30 days after the 
electronic notice is returned.
    (iii) Corrected statement. An Exchange must furnish a corrected 
statement to the recipient electronically if the original statement was 
furnished electronically. If the original statement was furnished 
through a Web site posting, the Exchange must notify the recipient that 
it has posted the corrected statement on the Web site in the manner 
described in paragraph (g)(5)(i) of this section within 30 days of the 
posting. The corrected statement or the notice

[[Page 26120]]

must be furnished by mail or in person if--
    (A) An electronic notice of the Web site posting of an original 
statement or the corrected statement was returned as undeliverable; and
    (B) The recipient has not provided a new email address.
    (6) Access period. Statements furnished on a Web site must be 
retained on the Web site through October 15 of the year following the 
calendar year to which the statements relate (or the first business day 
after October 15, if October 15 falls on a Saturday, Sunday, or legal 
holiday). The furnisher must maintain access to corrected statements 
that are posted on the Web site through October 15 of the year 
following the calendar year to which the statements relate (or the 
first business day after October 15, if October 15 falls on a Saturday, 
Sunday, or legal holiday) or the date 90 days after the corrected forms 
are posted, whichever is later.
    (7) Paper statements after withdrawal of consent. An Exchange must 
furnish a paper statement if a recipient withdraws consent to receive a 
statement electronically and the withdrawal takes effect before the 
statement is furnished. A paper statement furnished under this 
paragraph (g)(7) after the statement due date is timely if furnished 
within 30 days after the date the Exchange receives the withdrawal of 
consent.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: May 1, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-10419 Filed 5-2-14; 4:15 pm]
BILLING CODE 4830-01-P