United States 

Office of 

Personnel Management 

The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number: 18- 204 Date: October 12, 2018

Subject: Information to Fulfill Mandatory Reporting Requirements for Plan Year 2018

under Internal Revenue Code Sections 6056 and 4980H

I. Background 

Employers, including Federal agencies, are subject to the Employer Shared Responsibility (ESR) 

provisions under sections 6056 and 4980H of the Internal Revenue Code (IRC). The Internal 

Revenue Service (IRS) requires Applicable Large Employers (ALEs) to file information returns 

regarding health insurance coverage on or before February 28 if filing on paper, or March 31 if 

filing electronically, following the calendar year for which the offer of coverage is reported. 

ALEs are also required to furnish statements to each full-time employee about the health 

coverage the agency offered on or before January 31 of the year following the calendar year the 

offer was made. ESR reporting was not eliminated by the Tax Cut and Jobs Act of 2017, Public 

Law 115-97, signed into law on December 22, 2017. 

Purpose

This Benefits Administration Letter (BAL) provides information to assist Federal agencies for 

reporting in 2019 for health insurance coverage in 2018. Agencies that are applicable large 

employers as determined by OPM are required to report on behalf of employees. This BAL 

provides updates on affordability safe harbors and the lowest cost Federal Employee Health 

Benefits (FEHB) plan for the 2018 plan year. OPM releases guidance each year to inform 

agencies of specific requirements for the following reporting year. Please refer to BAL 15-204

for comprehensive guidance on IRC 6056 reporting. 

ALE and ALE Members 

Please refer to BAL 14-207, where OPM provided definitions of the ALE and ALE member. 

These definitions serve as the criteria for determining whether an agency is in or outside of 

OPM’s determined ALE.

IRS Required Deadlines 

For calendar year 2018 (health coverage provided in 2018), agencies must furnish Forms 1095-C 

to full-time employees on or before January 31, 2019. Agencies must file IRS Forms 1094-C 
and 1095-C with the IRS by February 28, 2019 if filing on paper, or March 31, 2019, if filing 

electronically.

II. Affordability 

For ESR reporting in calendar year 2018, the lowest cost FEHB plan, will, in most cases, be the 

NALC Value Option, enrollment code KM1. The NALC Value Option is the nationwide plan 

with the lowest cost share for the employee at $95.25 per month or $1,143.00 per year. 

Agencies may request further information on affordability as it relates to the FEHB Program at 

ESR@opm.gov. 

1

A. Affordability Safe Harbors 

For calendar year 2018, the NALC Value Option meets the threshold for the Form W-2 safe 

harbor for employees working a 40-hour work schedule and employed as a Grade 1, Step 1 and 

above on the General Schedule. It may meet the threshold for the rate of pay safe harbor for 

hourly employees depending on the number of hours worked and their hourly rate. It meets the 

threshold for the federal poverty line safe harbor. 

Agencies may request further information on the safe harbors as they relate to the FEHB 

Program at ESR@opm.gov.

B. Regional Low Cost Plans 

Certain regional FEHB plans have a lower enrollee cost than the NALC Value Option for 

calendar year 2018. These premium amounts should be considered when determining 

affordability for individuals living in geographic areas where these plans are available. A chart of 

these plans is below: 

Plan Name Code Option 2018 Enrollee Share 

(monthly premium rate)

Guam TakeCare KX1 HDHP Self $31.98

Health Net of California P61 Basic Self $76.60

Ohio AultCare HMO 3A4 HDHP Self $89.92

Humana Health Plans of Puerto Rico, Inc. ZJ1 High Self $91.93

Please contact ESR@opm.gov to request specific plan Zip Code information. 

III. Certification of Eligibility 

Alternative methods of reporting under section 6056 were developed by the IRS to offer a 

simplified method of employer reporting. These alternative reporting methods, the qualifying 

offer method and the 98% method, were described in BAL 15-204, and may permit employers to 

 

1

 This applies to all non-postal rates. 
provide less detailed information than under the general method for reporting. Employers 

choosing these methods must meet certain conditions, as explained in BAL 15-204.2 For calendar 

year 2018, the qualifying offer method is applicable to agencies. Agencies may use the 98% 

method if 98% of their full-time employees have been offered affordable health insurance in 

calendar year 2018. 

For 2018, the NALC Value option is again the lowest cost nationwide plan within the FEHB. 

Furthermore, the enrollee portion of the self only premium for the NALC Value option does not

exceed 9.56% of the mainland single federal poverty line.3 Therefore, for calendar year 2018, it 

meets all requirements and agencies using the NALC Value Option for their employees may use 

the qualifying offer method. 

If you have any questions regarding this Benefits Administration Letter, please contact Julia 

Elam, Program Analyst, Healthcare and Insurance at 202.606.2128 or email ESR@opm.gov. 

 Sincerely, 

 

Alan P. Spielman 

Director, Healthcare and Insurance

 

2 The conditions are described in detail in Subsections A through D of Section X in the preamble to the section 6056 

regulations and in the 2016 instructions for Forms 1094-C and 1095-C.

3 See IRS Rev Proc. 2017-36. Also, note, under IRS Rev. Proc. 2018-34, the affordability threshold will be 

increased to 9.86% for plan years beginning in 2019.