An official announcement on transition relief for employers from information reporting requirements under health care reform, as well as on the delay of key provisions of the employer play-or-pay mandate, was issued July 9 in Notice 2013-45 from the U.S. Department of the Treasury and IRS.
In unofficial announcements last week on the White House and U.S. Treasury Department websites, the government let it be known that it would delay employer reporting about coverage offered to workers; and it is suspending shared-responsibility payments in 2014.
Now, Notice 2013-45 builds on this with the following additional details.
- The delay will allow the government to spend time for dialogue with employers and other stakeholders in order to simplify the reporting requirements.
- No penalties will be applied for failing to report the information in 2014.
- Employers will not be required to calculate a penalty, because they presumably will not have filed the information reports.
- Proposed rules on the information reporting provisions are expected to be published this summer.
- Once the information reporting rules have been issued, employer plans and insurers will be encouraged to voluntarily comply with the information reporting provisions for 2014.
- The mandate that individuals be insured remains in effect; state-based health insurance exchanges will operate starting Oct. 1 this year; they will still issue health policies to individuals; and tax credits (subsidies) will be issued to those who demonstrate need.
- Individuals will continue to be eligible for the premium tax credits and coverage through exchanges. They can get tax credits to buy such coverage if they show that their household income is within 100 percent and 400 percent of the federal poverty limit, and that they are not eligible for minimum essential coverage through their employer or another source.
The Information Reporting
Section 6055 of the health care reform law requires annual information reporting by health insurers, self-insuring employers, government agencies and other providers of health coverage. Section 6056 requires annual information reporting by applicable large employers about the health coverage that they offer (or do not offer) to their full-time employees. This reporting will help determine whether an employer (that employs 50 or more workers) is liable for penalties under reform’s shared responsibility penalty provisions in Section 4980H of the law.
Section 6056 information reporting is important for the play-or-pay mandate because without it, an employer typically will not know whether a full-time employee received a premium tax credit.
In 2015 after the play-or-pay aspects of the employer mandate resume, IRS will analyze Section 6056 reporting and tax returns it receives from individuals claiming a tax credit to assess shared-responsibility penalties. It then will contact employers and gives them a chance to respond to the possibility that they owe penalties.
For more information, also see Thompson Information Services’ New Health Reform Law What Employers Need to Know.