The IRS has issued proposed regulations to implement the information reporting requirements for insurers and certain employers under the Patient Protection and Affordable Care Act (PPAC<). The proposals are a response to an ongoing dialog with representatives of employers, insurers, other reporting entities and individual taxpayers.
Provisions under PPAC< require reporting by insurers, self-insuring employers, and other parties that provide health coverage; and also require information reporting by employers that are large enough to be subject to the employer shared responsibility provisions. In early July 2013, the Obama Administration announced a postponement of PPAC’s mandatory employer and insurer reporting requirements for one year. As a result, the reporting requirements have been delayed until 2015.
However, once the final rules have been published, reporting entities are encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.
In general, PPAC< calls for the following among other things:
For providers of minimum essential coverage:
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Information about the entity providing coverage, including contact information.
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A list of individuals with identifying information and the months they were covered.
For applicable large employers (meaning employers with 50 or more full-time employees):
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Information about the applicable large employer offering coverage (including contact information for the employer and the number of full-time employees).
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A list of full-time employees and information about the coverage offered to each, by month, including the cost of self-only coverage.
The proposed rules describe a variety of options to potentially reduce or streamline information reporting, including:
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Replacing employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.
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Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.
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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.
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Allowing self-insured group health plans to avoid furnishing employee statements as both an applicable large employer and as a provider of minimum essential coverage by furnishing a single substitute statement.
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Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.
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Permitting health insurance issuers to forgo reporting on individual coverage offered through a Marketplace because that information will be provided by the Marketplace.
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Permitting health insurance issuers, employers, and other reporting entities providing minimum essential coverage to forgo reporting the specific dates of coverage (instead reporting only the months of coverage), the amount of any cost-sharing reductions, or the portion of the premium paid by an employer.
It is important to note that there may be changes to the proposed rules as they are finalized. However, this information may be valuable in helping to prepare your office for compliance with the reporting requirements of PPAC<. We will provide you with additional guidance as it is released by the IRS. If you have any questions regarding information reporting or other aspects of health care reform, please contact our office<.
George V. Famiglio, Jr, CPA/PFS, CFP, CFS, CGMA. Est. 1971
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