Universal Simplification Of ACA Employer Reporting Unlikely

The Internal Revenue Service is exploring ways to simplify Code Sec. 6056 reporting by employers but a one-size-fits-all approach is not the likely outcome, an IRS official recently predicted. The IRS has provided transition relief and proposed regulations on reporting, Stephen B. Tackney, deputy division counsel/deputy associate chief counsel, IRS Tax-Exempt and Government Entities (TE/GE) Division, told the ABA Health and Welfare Benefit Plans conference in Arlington, Va.

Reporting/Delay. Beginning in 2014, the Patient Protection and Affordable Care Act (ACA) generally requires applicable large employers, which must satisfy employer-shared responsibility requirements, to file returns reporting certain health care coverage information (Code Sec. 6056 reporting). The ACA also requires health insurance issuers, sponsors of self-insured health plans, government agencies that administer government-sponsored health insurance programs and other entities that provide minimum essential coverage to file annual returns (Code Sec. 6055 reporting).

In July, the White House announced a one-year delay in Code Sec. 6055 and Code Sec. 6056 reporting. Information reporting under Code Secs. 6055 and 6056 is optional for 2014. No penalties will be imposed for failing to comply with these provisions for 2014.

Simplification. The Treasury Department has indicated that it is exploring options to simplify or streamline reporting. Treasury described replacing employer statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses and dependents, eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees, and allowing employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount, among other proposals.

Tackney relayed that the IRS is reviewing simplification ideas. However, there will not be a universal simplification method for all employers, he indicated. Tackney did not elaborate on what simplification methods the IRS is reviewing.

SHOP. In related ACA news, the Department of Health and Human Services (HHS) announced a delay in the availability of the Small Business Health Option Program (SHOP). Qualified small employers, generally employers with 50 or fewer full-time employees, may purchase health insurance through SHOP for their employees. HHS explained that small employers can start the application process on October 1 but all functions of SHOP will be available in November. If employers and employees enroll by Dec. 15, 2013, coverage will begin Jan. 1, 2014, HHS explained.

Visit our News Library to read more news stories.