Enforcement of the Affordable Care Act’s employer mandate was delayed until 2015 to give the feds more time to simplify the employer reporting requirements that would make enforcement of the mandate possible. Now we’ve got our first look at what those rules will cover.
The IRS just released two sets of proposed reporting rules: one set for large employers subject to the employer mandate to provide coverage to full-time workers or pay a penalty — and another set for self-insured employers and insurance companies.
In total, the proposed rules take up 114 pages. But here’s what they ask for in a nutshell.
The first set of rules asks for large employers subject to the employer mandate to report:
- Data about the organization — like the contact information for the company and the number of full-time equivalent employees, and
- A list of the organization’s full-time employees and info about the insurance coverage offered to each — including the cost of individual coverage.
The second set of rules asks self-funded plans and insurers to report:
- Data about the entity providing insurance coverage — like the contact information for the company and, for self-funded employers, the number of full-time equivalent employees they have, and
- A list of covered individuals and the months during which they were covered.
These reporting requirements are meant to help the IRS determine which employers are complying with the employer mandate and help it identify individuals who may be eligible for a government subsidy to purchase coverage in a health exchange.
Although the reporting requirements won’t be enforced until 2015, the IRS is encouraging insurers and employers to submit this information in 2014.
Where the simplification comes in
All of that sounds pretty straightforward. Now here’s where the feds appear to be trying to simplify things.
The rules appear to be written with an eye toward avoiding the duplication of reporting efforts and the unnecessary collection of information, according to a Health Affairs blog post by Timothy Jost, a professor at the Washington and Lee University School of Law in Virginia.
Examples of the IRS’ simplification efforts, as referenced by Jost:
- Insurers aren’t required to report information about individuals covered by a health plan in an exchange, because that information can be obtained through the exchange, and
- Employers only need to report information about the lowest-cost plan offered to full-time equivalent employees, because that’s all that will be needed to determine whether an individual is offered “affordable” coverage.
In the rules, the IRS also asks for employer and insurer comments on other simplification measures it’s considering.
Example:
- Eliminating the need to calculate whether an individual is a full-time equivalent employee if he or she is offered “adequate” coverage regardless of their full-time status
- Allowing limited reporting by employers who offer no-cost coverage to employees and their families, and
- Allowing entities to report that the cost of coverage is zero if it costs $800 or less, because that amount would be less than 9.5% of the federal poverty line and render an employee charged this amount ineligible for a federal subsidy.
The IRS is soliciting comments on the proposed rules through Nov. 8, 2013.
This post originally appeared on our sister website, HRBenefitsAlert.com.
