The Affordable Care Act’s Employer Mandate requires employers that employ more than 50 full-time equivalent employees to offer full-time employees health insurance coverage or face penalties. To enforce the penalty assessment, the Act imposes new Information Return reporting requirements on employers under Code Section 6056. The Act also imposes reporting requirements on insurers and self-funded employer plans of their insurance products/coverage's and their claims data.
Insurers and employers have expressed concerns about the complexity of the requirements and the need for more time to implement them. The Obama Administration and the Treasury announced Tuesday, July 2, 2013, that there will be a one-year delay in the reporting requirements until 2015, and thus a one year delay in imposition of the Play or Pay penalties under the law. The IRS plans to focus on simplifying the reporting process and says the delay will provide insurers time to adapt health coverage to meet the requirements of the law and, most importantly, give employers the time to implement reporting systems and structure their health coverage and their work force to avoid the Play or Pay penalties.
Employers have expressed concern that the ACA created an administrative burden for them as they tried to update technology to meet the new reporting requirements and as they planned to design their health insurance coverage for their employees without knowing how much the coverage would cost. Although there will be no penalties imposed for 2014, the government is encouraging employers to voluntarily begin reporting in 2014 to test their reporting systems so they are ready for accurate reporting for 2015. Click here to read more.
