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IRS Releases Publications on Individual and Employer Shared Responsibility

From the March 19, 2015 EBIA Weekly

Publication 974

Publication 5200

Publication 5208

Publication 5209

The IRS has released four new publications relating to health care reform’s individual and employer shared responsibility provisions. Here are highlights of each:

  • Publication 974 (“Premium Tax Credit (PTC)”). This publication provides detailed information regarding the premium tax credit available to individuals purchasing health coverage on an Exchange. The IRS notes that the publication covers important topics that are not covered in the instructions to Form 8962 (“Premium Tax Credit (PTC)”). (Form 8962 is used to calculate and report the premium tax credit, and reconcile it with any advance payments of the credit—see our article.) Publication 974 includes a detailed flowchart designed to assist individuals in determining their eligibility for the tax credit, guidelines for determining if health coverage is minimum essential coverage, and additional instructions and worksheets for individuals in special tax situations. The publication reiterates that individuals are not eligible for the tax credit if they could have enrolled in employer coverage that is both affordable to the employee and provides minimum value. It also includes a number of examples illustrating when coverage is considered affordable. [EBIA Comment: Although the publication is intended for individuals, employers (particularly those subject to employer shared responsibility) may find these examples helpful.]
  • Publication 5200 (“Affordable Care Act: What Employers Need to Know”). This one-page information sheet geared to employers provides a general definition of “applicable large employer” (ALE) along with a side-by-side comparison of the obligations imposed by health care reform on employers that are and are not ALEs, as well as incentives available to smaller employers (e.g., eligibility for SHOP coverage and the small business health care tax credit). The publication provides only a high level summary but contains helpful links to more detailed information.
  • Publication 5208 (“Affordable Care Act: Are You an Applicable Large Employer?”). Like Publication 5200, this one-page information sheet is geared to employers, but it provides more specific information about how to determine ALE status (including 2015 transition relief). It covers the basic rules for counting employees and provides a broad overview of employer shared responsibility and related reporting requirements—with several links for further information.
  • Publication 5209 (“Preparing Your 2014 Return: The Shared Responsibility Payment…What You Need to Know”). Another one-page information sheet, Publication 5209 is geared toward individuals. This publication advises taxpayers that an individual shared responsibility payment may be due along with the 2014 income tax return for individuals who did not have qualifying health coverage during 2014 and did not qualify for an exemption from the requirement to maintain coverage. The publication provides basic instructions for figuring the payment amount (referring to the instructions for Form 8965 (“Health Coverage Exemptions”)). It also notes the maximum payment amount that may be due, and identifies the basic steps to report the payment. As with Publications 5200and 5208, embedded links lead to more detailed information.

EBIA Comment: With the individual tax filing deadline for 2014 approaching, and the employer shared responsibility rules now in effect for 2015, the IRS seems to be ramping up its communications efforts. Publication 974 provides detailed information for individuals, while the other three publications provide general, high level information for individuals and employers alike. Their collective release shows that the IRS is continuing to implement the individual and employer shared responsibility provisions, even as the Supreme Court is poised to rule on the validity of IRS regulations providing for premium tax credits on both state and federal Exchanges (see our article). For more information, see EBIA’s Health Care Reform manual at Sections XXVIII (“Shared Responsibility for Employers (Play or Pay Penalty Tax)”) and XXIX (“Shared Responsibility for Individuals (Individual Mandate)”).

Contributing Editors: EBIA Staff.

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