Earlier this month, the IRS proposed final regulations for employer and insurer reporting of Affordable Care Act coverage ahead of the implementation of the employer mandate.
Employers can expect some decreased regulation and overlap as well as some added bureaucracy to meet reporting requirements under the ACA. This reporting overall will help the IRS verify that eligible employees have been offered minimum essential coverage by required employers and that those employees who reject or are not eligible for coverage will receive the appropriate tax credits to purchase insurance from the marketplace.
Some key points for employers:
- Some reporting of employee coverage may be combined under overlapping sections of the tax code; other duplications will be removed
- Employees will receive some required notifications on their W-2s rather than in separate notices
- Companies that offer self-funded health care plans are exempt from some reporting requirements
- Employers must report if new employees are subject to a waiting period before insurance coverage begins
These regulations, if approved, will take effect in 2015. The initial mandatory reports will be due with 2016 tax returns, though the IRS is hoping many companies will choose to comply beginning in 2014 (with reports filed in 2015).
Small businesses (fewer than 50 employees) are not required to offer coverage under the ACA; however, those that do will be required to comply with reporting standards.