By Kristen Ricaurte
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
Wojick said he thinks the proposed rules are a good step
toward making the employer reporting burden more sensible.
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).
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
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.
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.
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.
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,”
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
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.”
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.
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.
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,”
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
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
“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.
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.
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Ricaurte Knebel in Washington at email@example.com
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