While most health insurance providers and large corporations are focused on who needs to be insured and how, the issue of providing proof to these covered individuals and the IRS is getting little attention.
LIGHTNING RELEASES: MINNEAPOLIS, MN (3/10/2014) – The IRS is scheduled to release final reporting regulations today, Monday, March 10th, providing long awaited clarity on the responsibilities that health insurance providers and large corporations will face in providing “proof of coverage”(IRC 6055 & 6056) to individuals and the Federal Government under the Affordable Care Act (ACA). This requirement is foundational to the legislation, providing a means to enforce both the large employer and individual mandates. As such, these reporting obligations will have broad implications for many organizations beginning in tax year 2015.
This new reporting will likely represent hundreds of millions of new 1095 forms as large employers and health insurers will need to provide proof of coverage to individuals in order for them to properly complete their year-end tax filings. Corporations who today file several hundred 1099 tax forms for contractors and vendors will now potentially be faced with producing and mailing tens of thousands of forms. These corporations may look to their health insurance providers to offer this reporting as a service, but health insurers will be faced with their own challenges as they will also be required to issue statements to individual members and subsequent reporting to the IRS. For many large health insurance providers this means hundreds of thousands up to millions of new forms.
The process of managing the required filing data for each covered individual, generating and mailing the forms, and transmitting the data to the IRS presents a number of business challenges that will be costly and may lead to member or employee dissatisfaction if not properly handled. “Information reporting to the IRS is complicated and subject to a number of penalties if the rules are not precisely followed,” said Brian Provost, Convey chief executive officer. “Organizations who are proactive in preparing for these new requirements will be in a much better position to avoid penalties and provide better service to their employees and members when the requirements are enforced in 2015.”
The release of final reporting regulations this week provides the needed clarity for large corporations and health insurance providers to fully evaluate what will need to be reported, how the forms will be produced, what data gaps exist and the process and technology solutions that will be necessary to make the reporting as compliant andefficient as possible. For 28 years, Convey has focused on providing technology tools and services to simplify and reduce costs related to tax information reporting. “While this is a completely new area of regulatory reporting that will be challenging and expensive for many organizations, the requirements are very familiar to Convey,” said Provost. “We look forward to working with corporations and health insurers to minimize the risks they face with these new regulations, and find the ideal solution to handle the reporting as simply and cost effectively as possible”
Since 1986, Convey has been at the forefront of the industry in providing third party reporting technology and services to over 2,200 clients, including over 125 Healthcare organizations and 9 of the top 20 life and health insurance providers in the United States. Convey’s flexible, scalable software and the guidance and focused experience of our compliance experts, have helped small companies and over half of the Fortune 500—rest assured that they’re complying with regulatory obligations and reporting efficiently and correctly, no matter the requirement or jurisdiction. Convey helps organizations reduce risk, improve operational efficiency and ensure client satisfaction by providing the clearest path to compliance. Learn more about Convey at: www.convey.com.