Final regulations: Health insurance coverage limited to testing, diagnosis not “minimum essential coverage” (COVID-19)
“Minimum essential coverage” does not include Medicaid coverage that is limited to COVID-19 testing and diagnostic services
Limited to testing, diagnosis not “minimum essential coverage” (COVID-19)
The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register final regulations (T.D. 9970) providing that “minimum essential coverage”—as that term is used in health insurance-related tax laws—does not include Medicaid coverage that is limited to coronavirus (COVID-19) testing and diagnostic services provided under the “Families First Coronavirus Response Act” (Pub. L. No. 116-127, March 2020).
The final regulations [PDF 295 KB] (27 pages) also provide:
- An automatic extension of time for providers of minimum essential coverage (including health insurance issuers, self-insured employers, and government agencies) to furnish individual statements regarding such coverage
- An alternative method for furnishing individual statements when the shared responsibility payment amount is zero
- An automatic extension of time for “applicable large employers” (generally employers with 50 or more full-time or full-time equivalent employees) to furnish statements relating to health insurance that the employer offers to its full-time employees
These final regulations adopt regulations that were proposed in December 2021, with clarifying modifications. Read TaxNewsFlash
Background
Section 6055 provides that those that provide minimum essential coverage to an individual must report certain information to the IRS that identifies covered individuals and the period of coverage.
The IRS in September 2020 issued Notice 2020-66 to provide that Medicaid coverage that is limited to COVID-19 testing and diagnostic services, pursuant to a provision of the “Families First Coronavirus Response Act,” is not minimum essential coverage under a government-sponsored program. The IRS notice also indicated that the regulations under section 5000A would be amended to reflect this guidance. Read TaxNewsFlash
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.