Final Rules on Information Reporting Requirements for Employers
First Reports Due in 2016
Two sets of final regulations provide guidance on, and simplify, the information reporting requirements under Health Care Reform. One set of rules relates to minimum essential coverage reporting by insurers and certain self-insuring employers, and the other set of rules relates to reporting on health insurance coverage offered by large employers.
The Affordable Care Act requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage to report information on this coverage to the IRS and to covered individuals. Large employers (generally those with 50 or more full-time employees, including full-time equivalents) are also required to report information to the IRS and to their employees about their compliance with the employer shared responsibility provisions (“pay or play”) and the health care coverage they have offered.
Highlights of the Final Rules
The final rules include the following key provisions:
- Employers can use a single, consolidated form to report to the IRS and employees. The combined form will have two sections: the top half includes the information needed for “pay or play,” while the bottom half includes the information needed for minimum essential coverage information reporting.
- Self-insuring employers that are large enough to be subject to the “pay or play” provisions will complete both parts of the combined form for information reporting.
- Employers subject to “pay or play” that do not self-insure will completeonly the top section of the combined form.
- For employers that provide a “qualifying offer” (an offer of minimum value coverage that is highly affordable, as specified in the rules) to any of their full-time employees, a simplified alternative to reporting monthly, employee-specific information on those employees is available.
- Employers certifying that they have made a qualifying offer to at least 95% of their full-time employees (plus an offer to their families) will be able to use an even simpler alternative reporting method for 2015.
- Employers who certify that they have met certain criteria have the option to avoid identifying in the report which of their employees are full-time, and instead to just include those employees who may be full-time.
- Certain data elements under the law that are not necessary to understanding the coverage offered and provided—such as the length of any waiting period, the employer’s share of the total allowed costs of benefits provided under the plan, and the amount of advance payments of the premium tax credit and cost-sharing reductions—are omitted.
The regulations apply for calendar years beginning after December 31, 2014. A reporting entity will not be subject to penalties if it first reports beginning in 2016 for 2015. Reporting entities are encouraged to voluntarily comply with the information reporting provisions for 2014.