Wednesday, September 3, 2014
Health Affairs Blog
August 29, 2014
Implementing Health Reform: Tax Form Instructions
By Timothy Jost
On August 28, 2014, the Internal Revenue Service re-released the draft
forms that will be used by employer, insurers, and exchanges for
reporting Affordable Care Act tax information to individuals and to the
IRS for 2014 and 2015, as well as the instructions for completing those
forms. The IRS also released in the Federal Register requests for
public comments on three of those forms – the 1094-B, the 1094-C, and
the 1095-C – under the Paperwork Reduction Act. This post reports on
these forms and instructions and on a guidance released by the Centers
for Medicare and Medicaid Services.
The tax forms had been published earlier and are described in an earlier
post. The instructions for the forms, however, had not been available
and had been eagerly awaited by employers, insurers, exchanges, and tax
professionals. Forms 1094-C and 1095-C will be used by large employers
with more than 50 full-time or full-time-equivalent employees to
determine whether the employer is responsible for penalties under the
employer shared responsibility requirements of the ACA. They will also
be used to determine whether employees have received an affordable and
adequate offer of coverage, rendering them ineligible for premium tax
credits. Employers are required to provide each full-time employee with
a form 1095-C and to file each of these together with a transmittal form
1095-B form with the IRS.
The instructions for the 1094-C and 1095-C are by far the most complex
of the instructions released on August 28, filling 13 pages with dense,
two column, print. Most of the complexity derives from the options for
complying with the employer mandate and the transition exceptions to
that mandate that the administration has created…
Implementing Health Reform: Tax Form Instructions, by Timothy Jost:
IRS - 2014 Instructions for Forms 1094-C and 1095-C (Draft):
Comment by Don McCanne
If you enjoy minutia, click on the links to the full blog post and the
draft instructions and read away.
Although today's message deals with only one minor provision of the
Affordable Care Act - the instructions for tax forms used to report ACA
tax information to individuals and to the IRS - the administrative
detail required is mind-boggling. Extrapolate that to all aspects of ACA
and it becomes obvious that, instead of gaining administrative
simplicity, ACA greatly increased administrative complexity - on top of
the most administratively complex health financing system in the world.
What a waste!
Timothy Jost's comment from yesterday's message can be repeated again
today: "We are doomed to continue to struggle with this complexity as
long as we stubbornly cling to a private health insurance-based health
care financing system."
at 2:59 PM