Final Rules on ACA Employer Reporting Requirements

Some say streamlined procedures remain overly complex and burdensome

By Stephen Miller, CEBS March 7, 2014

updated on 3/10/2014

The U.S. Treasury Department and the Internal Revenue Service issued two final rules that implement the information-reporting provisions for insurers and self-insured employers that take effect beginning in 2015 under the Affordable Care Act (ACA).

The rules, Information Reporting by Applicable Large Employers: Health Insurance Coverage Offered Under Employer-Sponsored Plans and Information Reporting of Minimum Essential Coverage, were published in the Federal Register on March 10, 2014.

Although 96 percent of organizations are not subject to ACA reporting requirements or the employer mandate to provide health care coverage because they have fewer than 50 full-time equivalent employees, in 2015 requirements begin to phase in for the remaining 4 percent of businesses that are required to offer quality, affordable coverage to workers or pay a penalty.

The final regulations sought to streamline reporting requirements for employers, particularly those that offer highly affordable coverage to their full-time employees. Specifically, the regulations instruct providers of minimum essential health coverage that are subject to the information-reporting requirements of Section 6055 of the Internal Revenue Code, enacted by the ACA, along with certain revisions to increase consistency with previous guidance issued under Section 6056.

Required Information

The ACA calls for employers and insurers to report information including:

For Internal Revenue Code Section 6055:

    • Information about the entity providing coverage, including contact information.
    • Which individuals are enrolled in coverage, with identifying information and the months for which they were covered.

For Internal Revenue Code Section 6056:

    • Information about the employer offering coverage (including contact information and the number of full-time employees).
    • For each full-time employee, information about the coverage (if any) offered to the employee, by month, including the lowest employee cost of self-only coverage offered.

    A reporting entity will not be subject to penalties for failure to comply with the section 6055 and 6066 information reporting provisions if it first reports beginning in 2016 for 2015 (including the furnishing of employee statements).

Single, Combined Form for Information Reporting

"Employers that self-insure will have a streamlined way to report under both the ACA's employer and insurer reporting provisions," according to a Treasury fact sheet. "Responding to widespread requests, the final rules provide for a single, consolidated form that employers will use to report to the IRS and employees under both sections 6055 and 6056, thereby simplifying the process and avoiding duplicative reporting. The combined form will have two sections: the top half includes the information needed for section 6056 reporting, while the bottom half includes the information needed for section 6055."

But some trade groups contend that the regulations are still overly complex and burdensome. "Complying with the ACA reporting requirements will be an extremely daunting task for businesses of all sizes," Christine Pollack, vice president of government affairs at the Retail Industry Leaders Association (RILA), told SHRM Online. "Despite the extensive policy recommendations the retail industry has provided to the administration, the final rules appear to do little to streamline or lessen the administrative burdens of these requirements." RILA had submitted a comment letter last November to the federal agencies outlining its concerns.

Simplified Option for Employer Reporting

As set out under the final regulations:

  • Organizations that are large enough to be subject to the employer coverage mandate and that self-insure will complete both parts of the combined form for information reporting.

  • Employers that are subject to the coverage mandate but do not self-insure will complete only the top section of the combined form (reporting for Section 6056). Insurers and other health coverage providers will report under just Section 6055, using a separate form for that purpose. Insurers do not have to report on enrollees in the ACA's public health insurance exchange, since the exchange will already be providing information on individuals’ coverage there.

For businesses that provide a “qualifying offer” to any of their full-time employees, the final rule provides a simplified alternative to reporting monthly employee-specific information on those workers:

  • A qualifying offer is an offer of minimum-value coverage that provides employee-only coverage at a cost to the individual of no more than about $1,100 in 2015 (9.5 percent of the federal poverty level), combined with an offer of coverage for the employee’s family.

  • For employees who receive qualifying offers for all 12 months of the year, companies will need to report just their names, addresses and taxpayer identification numbers (TINs) and the fact that they received a full-year qualifying offer. Employers will also give the workers a copy of the simplified report or a standard statement indicating that they received a full-year qualifying offer.

  • For employees who receive a qualifying offer for less than all 12 months, for each of those months, employers will be able to simplify reporting to the IRS and to workers by simply entering a code indicating that the qualifying offer was made.

  • To phase in the simplified option, the government will allow organizations certifying that they have made a qualifying offer to at least 95 percent of their full-time employees (plus an offer to their families) to use an even simpler alternative reporting method for 2015. Those employers may use the simplified, streamlined reporting method for their entire workforce, including for any employees who do not receive a qualifying offer for the full year. They will provide employees with standard statements relating to their possible eligibility for premium tax credits.

The final regulations also give employers the option to avoid identifying in the report which of their workers are full time and instead just to include those employees who may be full time. To take advantage of this option, a company must certify that it offered affordable minimum-value coverage to at least 98 percent of the employees on whom it is reporting.

Streamlined Information

The final regulations omit data elements in the statute that are not necessary to understanding coverage offered and provided. These include (but are not limited to):

  • The length of any waiting period.

  • Employer’s share of the total allowed costs of benefits provided under the plan.

  • The amount of advance payments of the premium tax credit and cost-sharing reductions.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

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