Allow Flexibility In ACA Reporting Requirements Business Group Urges IRS

Business leaders of leading U.S. companies say the proposed rules for reporting requirements under the Patient Protection and Affordable Care Act (ACA) are too complex and costly and are urging the Internal Revenue Service to allow employers more flexibility in meeting those requirements.

In a letter to the IRS dated November 8, the Business Roundtable said that implementing the rules would impose “additional financial and administrative burdens” on compliant employers. “We strongly encourage the IRS to take this into consideration as you develop final rules and permit such employers flexibility to comply,” wrote Gary Loveman, chairman of the Business Roundtable Health and Retirement Committee.

The letter specifically addressed two separate notices of proposed rulemakings on reporting requirements under the ACA published by the IRS on September 9: Information Reporting of Minimum Essential Coverage under Code Sec. 6055 and Information Reporting by Applicable Large Employers on Health Insurance Coverage offered under Employer-Sponsored Plans relating to applicable large employers who are required to report information under Code Sec. 6056.

The Business Roundtable recommended that employers who offer coverage be allowed to provide a certification to the IRS that they are offering affordable and minimum value coverage to full time workers and their dependents. “Such certification would be provided in lieu of reporting,” said Loveman. “Another option is to identify methods to inform the IRS and the relevant individuals through the W-2 form. This would show that the employer has offered the employee minimum value and affordable coverage.”

The Roundtable also requested that the IRS consider additional recommendations, including, working with the business community to develop workable alternatives or safe harbors that ensure employers will not be responsible for obtaining Tax Identification Numbers (TINs), Social Security numbers, or birthdates for employees’ dependents. Loveman noted that employers are often “not provided with and may not have access to such information, especially in cases where an employee’s dependent declines to enroll in coverage that is offered to the employee.”

In addition, the Roundtable said that there is significant duplication in the information to be gathered by the proposed 6055 and 6056 reporting requirements and recommended that the IRS combine the proposed reporting into a singular form. “This approach would minimize any burden associated with the required reporting without reducing the amount of information reported,” said Loveman. He also wrote that requiring employers to provide additional notice that the coverage offered meets the required standards would create financial and administrative burdens. “We have had some preliminary estimates of the cost to produce these reports and anecdotally some have stated that it could cost $56 per employee or $26 per covered life,” wrote Loveman.

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