Treasury, HHS Issue Final Rules To Ease ACA Reporting for Employers

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By Sara Hansard  

March 5 --The Treasury Department and the Internal Revenue Service issued final rules March 5 that aim to “substantially streamline reporting requirements for employers, particularly those that offer highly affordable coverage to full-time employees.”

The final rules (T.D. 9660; RIN 1545-BL31) provide for a single, consolidated form that employers that self-insure will use to report to the IRS and employees under tax code Section 6055, to help simplify the process and avoid duplicative reporting. The reporting is needed to show that employers and insurers are meeting requirements on whether plans meet minimum essential coverage. Failure to meet the minimum standard for insurance offerings could result in a “shared responsibility” fee that would be collected by the IRS. The rules are to be published March 10 in the Federal Register.

A separate set of Treasury Department final rules, which also are to be published March 10 in the Federal Register, (T.D. 9661; RIN 1545-BL26) provide for a simplified alternative for businesses to meet their information reporting requirements under tax code Section 6056. One option gives employers the ability to avoid identifying which of their employees are full-time.

“Today's announcement is part of the Administration's effort to provide certainty and early guidance about major health policies so employers, small business owners and other individuals can plan for 2015,” Treasury Assistant Secretary for Tax Policy Mark J. Mazur said in a statement. “Treasury's final rules significantly streamline and simplify information reporting while making it easier for employers and insurers of all sizes to provide the quality, affordable health coverage that every American deserves.”

Two-Year Extension for Noncompliant Plans

The Obama administration also issued a comprehensive set of regulatory guidance and rules allowing individual and small group health plans that don't comply with the Affordable Care Act to be extended for two years, simplifying rules that employers must follow, and modifying risk adjustment programs for health insurers to keep premiums stable under the new policies.

Individuals and small groups in health plans that don't comply with the Affordable Care Act can keep the plans for an additional two years, extending to policy years beginning on or before Oct. 1, 2016, under a bulletin issued by the Department of Health and Human Services.

The HHS also released a Notice of Benefit and Payment Parameters for 2015 final rule (CMS-9954-F) (RIN 0938-AR89) that, among other things, makes it easier for health insurers to get risk adjustment payments, in part because of administration policies that affect the populations of people who will enroll in ACA marketplace plans. The rule is to be published March 11 in the Federal Register.

The HHS said it is considering proposing that states could recommend modifications to an ACA provision giving employees a choice of plan options in the Small Business Health Options Program (SHOP) marketplaces. But the HHS final rule has standards for employee choice in the federally facilitated SHOP marketplace.

No Change to March 31 Deadline

In a telephone briefing with reporters, senior administration officials said the deadline for individuals to sign up for 2014 coverage or face penalties would remain March 31. They denied that the extension for noncompliant health plans, which were already extended a year through 2014 by President Barack Obama, was made to help Democrats in the upcoming congressional elections in November.

A fact sheet issued by the Centers for Medicare & Medicaid Services said the provisions were developed in “close consultation” with members of Congress “including but not limited to” Sens. Mark Warner (D-Va.), Mary Landrieu (D-La.), Jeanne Shaheen (D-N.H.) and Mark Udall (D-Colo.) and nine House Democrats including Tim Bishop (D-N.Y.) and Elizabeth Esty (D-Conn.).

In a statement, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) criticized the administration's actions. “The latest delay underscores the President's misguided fixation on political gains over the disastrous impact ObamaCare is having on Americans. This move is a cynical ploy that delays thousands of insurance policy cancellations until after the elections, in the hopes that Americans won't notice the spiking premiums and shrinking options they face under the President's health care law. Nothing, however, can distract from the fact that the President blatantly broke his promise that 'if you like your plan you can keep your plan.' ”

Goals Are Clarity, Certainty

In the phone briefing, an administration official said, “We wanted to learn from last year and improve on getting information out.” The goal “is to provide certainty and clarity as early in 2014 as possible so consumers, businesses, insurers, insurance commissioners all know what's coming and can plan for it,” the official said. The policies “reflect the concerns we've heard from families, from states.”

The extension of noncompliant plans would only be in states that give insurers the option of extending the plans. Obama announced in November 2013 that the plans could be extended through 2014 after controversy erupted when many noncompliant plans were canceled.

The administration officials said the RAND Corp. has estimated that fewer than 500,000 individuals remain in noncompliant plans, and the number is expected to diminish further by 2016 as people move into the ACA marketplaces. The Congressional Budget Office has estimated that a total of 1.5 million in both the individual and small group markets were in the noncompliant plans, they said.


To contact the reporter on this story: Sara Hansard in Washington at

To contact the editor responsible for this story: Brian Broderick at