The Affordable Health Care Act (ACA) introduced new tax forms relevant to individuals, employers and health insurance providers. Recently, our legal counsel has reviewed ACA guidance to determine if the MERS Health Care Savings Program (HCSP) is minimum essential coverage (MEC) and therefore reportable under the 1094-B and 1095-B tax forms.
While the MERS Health Care Saving Program is not specifically addressed in the ACA, it does share some similarities with plans such as Health Reimbursement Accounts (HRA) or VEBAs, which are addressed. The IRS requires retiree-only HRAs to be reported. In an abundance of caution, we will annually provide your terminated / retired employees, with an account balance, an IRS Form 1095-B.
In addition, for your convenience, we will also file the employer required 1094-B form to the IRS on your behalf. Enclosed are copies of the 2015 filings for your records.
Here is what you should know:
The IRS requires retiree-only HRAs to be reported, so it is likely the IRS may require employers to report the HCSP for any month a terminated / retired employee has a Health Care Savings Program balance.
The Health Care Savings Program is not considered MEC for your active employees because they are not currently eligible to access their account.
Medicare exempts reporting those employees who are over age 65; thus, your terminated/ retired employees will not be receiving a form.
We realize that many of our employer customers provide separate health insurance to their retirees, and are therefore not required to report the HCSP coverage to their former employees due to an exception in the law. However, again in the abundance of caution, we will be providing all terminated/ retired employees with an HCSP balance a 1095 tax form for their records.
We will continue to monitor this closely, and aid our customers in every way possible to comply with the requirements of the law.