1 

United States Office of 

Personnel Management The Federal Government’s Human Resources Agency

Benefits Administration Letter

Number: 19- 202 Date: July 30, 2019

Subject: Information to Fulfill Mandatory Reporting Requirements for Plan Year 2019 

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 2020 for health insurance coverage in 2019. 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 2019 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 2019 (health coverage provided in 2019), agencies must furnish Forms 1095-C 

to full-time employees on or before January 31, 2020. Agencies must file IRS Forms 1094-C 
2 

and 1095-C with the IRS by February 28, 2020 if filing on paper, or March 31, 2020, if filing 

electronically.

II. Affordability 

Health coverage is considered affordable when the employee’s share of the premium for the Self

Only coverage offered to the employee would cost the employee less than 9.86 percent of that 

employee’s annual household income. For purposes of ESR reporting for calendar year 2019, 

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 non-Postal 

employees and annuitants at $97.16 per month or $1,165.92 per year. Agencies may request 

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

2

1 

ESR@opm.gov. 

A. Affordability Safe Harbors 

For calendar year 2019, the NALC Value Option meets the threshold for the Form W-2 safe 

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

General Schedule. For calendar year 2019, the NALC Value Option plan may meet the threshold 

for the rate of pay safe harbor for hourly employees (non-salaried) depending on the number of 

hours worked and their hourly rate. In addition, it also 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 2019. These premium amounts should be considered when determining 

affordability for purposes of Internal Revenue Code for individuals living in geographic areas 

where these plans are available. A chart of these plans is below: 

Plan Name Code Option 2019 Enrollee Share 

(monthly premium 

rate)

Guam TakeCare KX1 HDHP Self $25.93

Health Net of 

California

P61 Basic Self $83.09

Humana Health Plans 

of Puerto Rico, Inc.

ZJ1 High Self $91.28

Ohio AultCare HMO 3A4 HDHP Self $93.31

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

 

1 Under IRS Rev. Proc. 2018-34, the affordability threshold was increased to 9.86% for plan years beginning in 

2019.

2 This applies to all non-Postal rates. 
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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 percent method, were described in BAL 15-204, and may permit 

employers to provide less detailed information than under the general method for reporting. 

Employers choosing these methods must meet certain conditions, as explained in BAL 15-204.3

For calendar year 2019, the qualifying offer method is applicable to agencies. Agencies may use 

the 98 percent method if 98 percent of their full-time employees have been offered affordable 

health insurance in calendar year 2019. 

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,

 

Laurie Bodenheimer 

Acting Director

Healthcare and Insurance 

 

3 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 2018 instructions for Forms 1094-C and 1095-C.