Many organizations provide employees the opportunity to waive their right to the offered medical coverage and receive taxable reimbursement in return. But how does that get reported on the newly required 1095-C form? IRS Notice 2015-87 has now stated that all such arrangements in place prior to December 17, 2015 need not do any reporting of this option. The notice does provide that such payments will be added to the employee’s cost of coverage for purposes of determining the employee’s eligibility for a subsidy on the Exchange and whether the employee might be exempt from a penalty under the individual mandate. The calculation for affordability will, however, be the amount the employee receives for the opt-out plus the amount the employee would have had to pay in the absence of the opt-out provision.

All this is true…of course…until the final regulations are issued, so…