Priority Health Issues Comment on Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules

WASHINGTON, Jan. 4 -- Nicholas P. Gates, vice president of finance at the Priority Health, has issued a public comment on the Internal Revenue Service's proposed rule entitled "Application of the Employer Shared Responsibility Provisions and Certain Nondiscrimination Rules to Health Reimbursement Arrangements and Other Account-Based Group Health Plans Integrated with Individual Health Insurance Coverage or Medicare". The comment was written on Dec. 20, 2019, and posted on Dec. 30, 2019:

* * *

Priority Health is an award-winning, Michigan-based, non-profit health plan nationally recognized for improving the health and lives of the nearly million members we serve. As the second-largest health plan in Michigan, and the fifth-largest provider-sponsored health plan in the nation, we are working hard to change the way care is delivered, focusing on affordability, engaging people in their health, and offering innovative products.

We continue to lead the industry in engaging members in their health, delivering effective health and disease management programs while also working with physicians to improve health care outcomes. The State of Michigan has twice named the Priority Health HMO the benchmark plan for all individual and small group plans to model.

Priority Health offers a broad portfolio of health benefit options for employer groups and individuals, including Medicare and Medicaid plans. We follow a mission that places the health of our members first. Our network of health care providers features 95 percent of practicing physicians available in Michigan and more than 900,000 health care providers across the United States.

The Patient Protection and Affordable Care Act added Section 6055 to the Internal Revenue Code beginning in 2015. This new section requires health issuers, self-insuring employers, government agencies and other providers of minimum essential coverage to file and furnish annual information returns and statements regarding coverage provided. The purpose of this reporting is to supply the Department of the Treasury with a channel to administer the individual mandate. However, the Tax Cuts and Jobs Act of 2017 passed by Congress eliminated "the shared responsibility payment for individuals failing to maintain minimum essential coverage."

The change in law erased the need for health plans and other reporters to provide proof of minimum essential coverage. The Department of the Treasury could provide relief to reporters of minimum essential coverage through guidance that establishes that as long as the shared responsibility payment remains at zero, Section 6055 reporting is not required. Taking such a proactive step would help fulfill President Trump's direction to "cut the red tape," saving health plans and their members millions of dollars currently being spent to produce needless paperwork.

Priority Health appreciates the recent guidance in Notice 2019-63 announcing the Treasury will no longer enforce the requirement that reporters mail a Form 1095-B to health coverage subscribers. However, we also believe this rule does not adequately address the costs derived from this reporting and urge further reduction in excessive regulatory burden. We support making our health care system as efficient as possible, reducing unnecessary costs. Under the current regulatory regime, insurers, the federal government, and even state Medicaid plans must continue to prepare the reports for transmittal to the Treasury while maintaining a system for on-demand requests of Form 1095-B. More action can be taken by the department to ensure that our health insurance system remains as cost-effective and efficient as possible. Priority Health recommends the following:

* The Department of the Treasury communicates to taxpayers that the Forms 1095-B will not be issued while the shared responsibility payment remains set to zero.

* Relieve reporters of the obligation to file Form 1094-B and to mail Forms 1095-B. There is no compelling reason why the Treasury should collect these reports. Furthermore, mailing the documents may cause more confusion among taxpayers than eliminating them altogether. Relieving reporters of this obligation would not only lessen a regulatory burden on health insurance providers but could also result in savings to the Treasury, which would no longer need to support systems built to collect and analyze the information.

* Self-funded employers should also be relieved of the obligation to report, both to the Treasury and to their employees, the minimum essential coverage dates for their workforce. Notice 2019-63 does not extend relief to self-funded employers from completing Form 1095-C Part III--the sole purpose of which is to provide tax preparers with information about health coverage, a now unneeded requirement. While Form 1095- C Parts I and II are used to monitor the employer mandate, and thus remain useful and practical, removing the Section 6055 reporting from the burdensome federal obligations placed on self-funded employers would promote efficiency and save regulatory-added costs.

Priority Health is a different kind of health insurance provider. We continuously look for innovative ways to effectively and efficiently serve our members and lower costs without undermining care. We appreciate the Department of the Treasury incorporating our comments into its decision-making process.

Sincerely,

Nicholas P. Gates

Vice President, Finance

Priority Health

* * *

The proposed rule can be viewed at: https://beta.regulations.gov/document/IRS-2019-0042-0001

TARGETED NEWS SERVICE, Harwood Place, Springfield, Virginia, USA: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com