MERS' legal counsel has determined that the Health Care Savings Program may qualify as minimum essential coverage (MEC) under the Affordable Care Act (ACA) and therefore should be reported to the IRS using forms 1094-B and 1095-B. Only those participants who have access to their account for qualified medical expense reimbursements - generally this refers to retired participants or their beneficiaries with an account balance – need to be reported using these forms.
What does this mean for you?
Employers who sponsor such programs are required to file a 1094-B Transmittal of Health Coverage Information Returns form (one per municipality) and a 1095-B Health Coverage form (one for each terminated employee or beneficiary) with the IRS.
New for tax year 2019:
Previously, all employers were required to provide a completed 1095-B Health Coverage form (.pdf) to each of their terminated employees (or their beneficiary) who have an HCSP account balance. The IRS has changed this guideline for tax year 2019. Employers are not required to take the above action if they meet the following two conditions:
- A notice is posted prominently on the municipality’s website or intranet stating that eligible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that eligible individuals can use to contact the employer with any questions, and
- The municipality furnishes a 2019 Form 1095-B to any eligible individuals upon request within 30 days of the date the request is received
MERS continues to provided you with the data necessary to complete the forms in your secure Employer Portal should participants request this information.
- March 2, 2020 (extended from January 31, 2020*) – Deadline to provide a completed 1095-B form to terminated HCSP participants/beneficiaries with an account balance (if the two conditions listed above are not met).
- February 28, 2020 (if filing by paper) or March 31, 2020 (if filing electronically) – Deadline to file completed 1094-B and 1095-B forms with the IRS.
- When completing the 1095-B form, MERS encourages employers to speak with their tax consultant(s) to confirm the sections of the form apply to their municipality. MERS does not know this information.
- The information on the form should be completed by the Employer (Employer name, address and Employer Identification Number are required on the form). MERS does not know your EID.
- HCSP is not health coverage; it is a reimbursement arrangement and is considered "employer sponsored" for the purposes of minimal essential coverage.
- Employers are not required to complete both Part II and Part III on each form - the Tip on page 7 of the Instructions for Forms 1094-B and 1095-B booklet (.pdf) states:
"Employers reporting self-insured group health plan coverage on Form 1095-B enter code B on line 8, but don't complete Part II. If you entered code B for self-insured coverage, skip Part II and go to Part III."
Frequently Asked Questions
Do I need to report for Medicare-eligible participants?
No. Medicare exempts from reporting for employees who are over age 65; thus, these participants do not need to receive a form.
Why don't I need to report for my active employees?
The Health Care Savings Program is not considered MEC for active employees because they are not eligible to access their account.
Why am I receiving data to report for someone who is not a former employee?
The report you receive in the Employer Portal will contain the data of anyone who is eligible to use their HCSP account balance for qualified medical expenses and the months in which they were eligible and/or carried a balance. This could be a former employee from your municipality OR their beneficiary. MERS' legal counsel has advised that it is lawful for employers to have access to beneficiary data for the purpose of filing a 1095-B form on their behalf.
I provided retiree health insurance for employees or COBRA in 2018. DO I need to file for those retired employees?
If you provided retiree health insurance or covered former employees under COBRA for their 2018 filing, you do not also need to file a 1095-B on behalf of those former employees. One filing per Social Security number is sufficient. If the retiree or terminated participant is not participating in another health insurance option, or is not taking COBRA, then the employer should file a 1095-B form on behalf of that former participant. It is not enough to just offer COBRA or a health insurance plan; the participant must have been covered under COBRA or the health insurance plan during the 2018 filing year in order to not file a 1095-B on behalf of their behalf.