Reporting Rules Aim to Simplify Requirements But Could Be Burdensome, Practitioners Say

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By Kristen Ricaurte Knebel  

Sept. 11 --While proposed rules on information reporting requirements under the Affordable Care Act were designed to make things as easy as possible for employers, the rules could still leave some burdensome tasks for employers to complete, retirement groups and practitioners told Bloomberg BNA in a series of interviews.

“What they're trying to do is a good thing. [They're] trying to reduce redundant reporting. Trying to use existing means of reporting rather than create new means of reporting. They're also looking for ways to reduce the requirements and burden for employers who are offering coverage that meets the ACA requirements,” Steve Wojick, vice president of public policy for the National Business Group on Health, said Sept. 10.

Wojick said he thinks the proposed rules are a good step toward making the employer reporting burden more sensible.

There is a “tremendous amount of information to keep track of and report,” which could lead to some “cumbersome and expensive challenges for employers,” said Gretchen Young of the ERISA Industry Committee.  

Although the aim of the proposed rules may be to reduce requirements and burden, the rules require an “overwhelming amount” of information to be collected and reported to the Internal Revenue Service and employees, Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, said Sept. 9.

There is a “tremendous amount of information to keep track of and report,” which could lead to some “cumbersome and expensive challenges for employers,” Young said.

On Sept. 5, the Treasury Department and the IRS released proposed rules on reporting minimum essential coverage under tax code Section 6055 and ACA employer information reporting requirements under Section 6056 (31 HRR 933, 9/9/13).

Section 6055 requires health insurance issuers, sponsors of self-insured health plans and government agencies that administer government-sponsored health insurance programs to submit annual returns to the Internal Revenue Service with information on each full-time employee to whom they provided minimum essential health insurance coverage during the tax year for which they are reporting.

Under Section 6056, large employers with 50 or more full-time-equivalent employees are required to report information to the IRS. The information includes whether and what kind of health care coverage they have offered employees and their compliance with the employer shared-responsibility provisions of Section 4980H, also known as the employer mandate. Employers are also required under Section 6056 to provide employees with statements to be used to help determine whether they can claim a premium tax credit under Section 36B to help pay for health care insurance.

'Complex Process.'

Kathryn Wilber, senior counsel for health policy at the American Benefits Council in Washington, said Sept. 10 having proposed guidance is a welcome development for employers.

“I think we're pleased to see that a regulation has been proposed. Before that point we just had a request for comments. So now we have something to really work with here in terms of what the possible rules might be,” Wilber said.

It is important for the IRS to provide flexibility for employers, Wilber said, because “it's going to be a complex process” that will require the additional time that was provided in Notice 2013-45's transitional rules (31 HRR 735, 7/15/13). In the notice, the IRS announced it was delaying the reporting requirements for employers subject to Section 6056 until 2015.

“We would also, like many others, ask the Treasury Department to consider a simplified route to this reporting [and to] try to find ways to minimize duplication and burden. The regulations at least offer some possibilities,” Wilber said.

Simplified Reporting

Those possibilities are the simplified methods of reporting for certain applicable employers that the proposed rules lay out, along with the general reporting requirements for employers.

Helen H. Morrison, a principal in the national tax department at EY in Washington and a former deputy benefits tax counsel in the Treasury Department's Office of Tax Policy, said Sept. 11 that the simplified method for employers offering coverage to all full-time employees may “be a very favorable or helpful alternative reporting approach for companies.”

Another simplified reporting method that the IRS is contemplating would allow employers to combine the Section 6056 reporting with Form W-2 reporting, which could be helpful to some employers, Morrison said.

“For some employers, in particular employers that have lower turnover, the combined 6056 and W-2 reporting method I think could work nicely. I'm not certain how helpful it will be for all employers because reporting all information on the W-2 only applies if the employee worked with the employer for the full calendar year and the employee contribution for self-only coverage was the same for all 12 months of that year,” Morrison said.

Wojick said the simplified reporting that the IRS is considering indicates that the service is listening to employers who are worried about the burden of all the reporting requirements.

“I think they're listening to employers saying, 'Hey, this is burdensome and we're employers starting from different places so can you be more flexible?' And I think one of the key things to remember is that most of the proposed options to simplify here they say are options, they're not required,” Wojick said.

Section 6055

Many employers are focused on the Section 6056 proposed rules because of the large amount of information required to be reported to both the IRS and employers, but that does not mean the proposed rules under Section 6055 should be ignored by providers of self-insured health plans, Morrison said.

The reporting requirements for Section 6055 reporting only pertain to employees who are actually covered by their employer's health plan, which may be why these proposed rules are getting a little less attention, Morrison said.

“There was some helpful guidance that the IRS put out by permitting if the 6055 statement is going to employees that they can send a single report to the same address. So if all of the covered lives are at the same address, they can send a single statement,” Morrison said.

Comments Important

Alden J. Bianchi, a member at Mintz Levin Cohn Ferris Glovsky & Popeo, said Sept. 9 that employer comments are essential for these proposed rules because if the IRS wants to simplify the reporting requirements, the regulated public must make their voices heard.

Morrison also thought comments on this rule would be beneficial, saying that employers should make sure to give feedback on the general methods of reporting laid out in the rules, as well as the methods for simplified reporting.

“The fact that we now have rules that employers and others can react to by providing IRS with comments is very helpful. I also think it will be helpful for the Administration to absorb the comments quickly in order to finalize the rules so that employers are in a position to move forward toward implementation in 2015,” Morrison said.

“Obviously this is a whole new world for employers and once the regulations are finalized they will need to move forward and assess what is the best way to approach the reporting,” she said.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Dana Domone at