Information Reporting Proposed Rules Issued
September 9, 2013
On September 5, 2013, the Departments of Treasury and the Internal Revenue Service issued proposed regulations on the information reporting requirements related to the individual mandate and the employer mandate provisions of the Patient Protection and Affordable Care Act (PPACA).
Minimum Essential Coverage Reporting
This regulation provides guidance on how insurers and employers must report to the IRS and to covered individuals whether their health plan provides minimum essential coverage, as required by the individual mandate.
This reporting requirement will assist the IRS in determining whether individuals are complying with the individual mandate, and also whether they are eligible for a premium tax credit to use toward purchasing coverage on the Marketplace/Exchange because they lack minimum essential coverage.
Voluntary reporting is encouraged for the 2014 calendar year, which would be done in early 2015. However, no penalties will be assessed until 2016 when the reporting for 2015 is due.
Information Reporting for Large Employers
This regulation provides guidance to employers with 50 or more full-time or full-time equivalent employees who are subject to the employer mandate. This regulation defines how employers must provide information to the IRS and to their employees regarding the health care coverage they offer to full-time employees.
This reporting will be used to determine whether large employers are complying with the employer shared responsibility requirement and will also help identify individuals who are not eligible for premium tax credits because they have been offered coverage by their employer.
The employer mandate was originally scheduled to take effect in January 2014. However, implementation has been delayed to 2015, partially to allow more time to define these reporting requirements. The first reports are due in early 2016 for the 2015 calendar year.
Proposed Reporting Simplification
The proposed rules include a variety of proposals the IRS is considering to streamline information reporting. There is a 60-day comment period to allow employers and insurers to provide feedback to the IRS on these proposals with the goal of further simplifying the reporting requirements.
Some of the proposed simplifications include:
- Allowing employers to report employer-sponsored coverage to employees on the Form W-2 issued at the end of each year rather than on a separate statement.
- Not requiring insurers and employers to report the specific dates of coverage, but instead to report only the month of coverage.
- 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 of employer-sponsored coverage to an employee only if the cost is above a specified dollar amount.
- Allowing self-insured employers to provide a single statement to employees that meets both the individual mandate and employer mandate reporting requirements.
- Not requiring health insurers to provide reporting for individual coverage offered through the Marketplace/Exchange because that information will be provided by the Marketplace.
For more details, here are links to the guidance:
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