The IRS has released proposed regs that would amend Reg §1.5000A-2 by adding Medicaid coverage for COVID-19 testing and diagnostic services to the types of coverage under Reg §1.5000A-2(b)(2) that do not qualify as minimum essential coverage under a government-sponsored program. The proposed regs would also provide extensions of time for health insurance issuers and employers to comply with reporting requirements.
Minimum essential coverage. Eligible individuals who purchase a qualified health plan through a health insurance exchange established under section 1311 of the Affordable Care Act may claim a premium tax credit under Code Sec. 36B.
A qualified health plan must provid “minimum essential coverage.” Various types of health plans and programs, including certain government-sponsored programs such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and Tricare provide minimum essential coverage. (Code Sec. 5000A)
Reporting requirements. Everyone who provides minimum essential coverage to an individual must report certain information to the IRS that identifies covered individuals and the period of coverage. (Code Sec. 6055)
In addition, applicable large employers (ALE) are required to file annually information returns and furnish written statements about what health insurance, if any, the ALE offers to its full-time employees. (Code Sec. 6056)
COVID-19 testing and diagnostic services. Notice 2020-66, 2020-40 IRB 785, provides that Medicaid coverage that is limited to COVID-19 testing and diagnostic services under section 6004(a)(3) of the Families First Coronavirus Response Act (PL 116-127) is not minimum essential coverage under a government-sponsored program.
Notice 2020-66 further indicates that the IRS intended to amend Reg §1.5000A-2 to provide guidance respecting Medicaid coverage for COVID-19 testing and diagnostic services.
Proposed regs. These proposed regs would amend Reg §1.5000A-2 by adding Medicaid coverage for COVID-19 testing and diagnostic services to the types of health coverage that do not qualify as minimum essential coverage under a government-sponsored program under Reg §1.5000A-2(b)(2).
In addition, the proposed regs would provide an automatic extension of time for providers of minimum essential coverage (such as health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage and would provide an alternative method for furnishing individual statements when the shared responsibility payment amount is zero.
Further, the proposed regs would provide an automatic extension of time for “applicable large employers” (generally employers with 50 or more full-time or full-time equivalent employees) to furnish statements relating to health insurance that the employer offers to its full-time employees.
These proposed regs would affect some taxpayers who claim the premium tax credit; health insurance issuers, self-insured employers, government agencies, and other persons that provide minimum essential coverage to individuals; and applicable large employers.
Individuals who want to comment on these regs should submit their comments via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG-109128-21).
To continue your research on minimum essential coverage, see FTC 2d/FIN ¶A-6403.
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