On September 5, 2013, the US Department of the Treasury and the IRS issued proposed regulations to implement the information reporting requirements for insurers and certain employers under the Affordable Care Act (ACA). The regulatory proposals reflect an ongoing dialogue with representatives of employers, insurers, other reporting entities, and individual taxpayers.
"Today's proposed rules enable us to continue engaging on how best to implement the ACA reporting requirements in a more streamlined and focused manner," said Assistant Secretary for Tax Policy Mark J. Mazur. "We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring about a smooth implementation of those new rules. Doing so will help ensure that the ACA effectively and efficiently delivers its historic tax benefits that promote health security for all Americans."
The ACA provides for information reporting (under Internal Revenue Code section 6055) by insurers, self-insuring employers, and other parties that provide health coverage. It also provides for information reporting (under Code section 6056) by employers that are large enough to be subject to the employer shared responsibility provisions regarding the health coverage they offer their full-time employees. These proposed regulations reflect comments received and an ongoing dialogue with stakeholders, including plan sponsors, many of whom already offer their full-time workforce coverage far exceeding the minimum employer shared responsibility requirements. Nearly 95 percent of employers with more than 50 full-time employees already offer coverage to their employees.
The proposed rules issued today describe a variety of options to potentially reduce or streamline information reporting, such as:
- Replacing section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.
- Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.
- Allowing employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount.
- Allowing self-insured group health plans to avoid furnishing employee statements under both section 6055 and section 6056 by furnishing a single substitute statement.
- Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.
- Permitting health insurance issuers to forgo reporting under section 6055 on individual coverage offered through a Marketplace because that information will be provided by the Marketplace.
- Permitting health insurance issuers, employers, and other reporting entities under section 6055 to forgo reporting the specific dates of coverage (instead reporting only the months of coverage), the amount of any cost-sharing reductions, or the portion of the premium paid by an employer.
The statute calls for employers, insurers, and other reporting entities to report, among other things:
For section 6055:
- Information about the entity providing coverage, including contact information.
- A list of individuals with identifying information and the months they were covered.
For section 6056:
- Information about the applicable large employer offering coverage (including contact information for the employer and the number of full-time employees).
- A list of full-time employees and information about the coverage offered to each, by month, including the cost of self-only coverage.
Stakeholders are invited to submit comments on the section 6055 and 6056 proposed rules through early November. The public comments will be taken into account in developing final reporting rules.
Once the final rules have been published, reporting entities will be encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.
Source: September 5, 2013, US Department of the Treasury Press Release