ERIC Urges IRS to Further Simplify ACA Employer Information-Reporting Requirements

November 14, 2013

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ERIC News Release

For Immediate Release:  November 14, 2013

Washington, D.C. – The ERISA Industry Committee (ERIC) today filed comments urging the IRS to further revise and simplify the proposed regulations concerning reporting requirements applicable to health insurance coverage offered under employer-sponsored plans.    

ERIC’s letter addresses two sets of regulations proposed by the IRS:  1) reporting requirements under Internal Revenue Code (IRC) section 6055 to determine whether an individual has the coverage necessary to avoid the individual mandate penalty under the Affordable Care Act (ACA); and 2) reporting requirements under IRC section 6056 to help determine whether an employer owes the ACA shared responsibility penalty and whether an individual is eligible for subsidized coverage on an Exchange. 

ERIC explains that the suggested reporting methods generally are not appropriate for most large employers and the related financial and administrative costs would not be commensurate with the benefit received. 

“While we very much appreciate the efforts the government has gone through to simplify the reporting requirements, the time, effort, and cost to comply with the regulations would place an excessive burden on employers and could result in increased costs to participants.  We strongly believe that there are easier ways to obtain the necessary information,” said Gretchen Young, ERIC’s Senior Vice President for Health Policy.  

ERIC suggests that the most appropriate and cost-efficient method for determining liability for both the individual and employer penalties would be a system in which employers affirm in an annual certification that they have met their shared responsibility requirements to provide minimum essential coverage to 95% of their full-time employees and places responsibility on individuals for establishing that they fulfilled their coverage obligation for themselves and their dependents.

“Companies should only be required to provide information to individuals upon request as the vast majority of workers will not need this information as they are already covered under their employers’ plans,” Young noted.

In the event the IRS does not adopt this approach, then ERIC requests that employers be permitted to elect an alternative “check-the-box” option whereby employers certify that they offer minimum essential coverage to at least 95% of full-time employees and their dependents.  Under this second approach, however, companies would also provide -- to the IRS and covered employees --  information about the employer, the names of employees and dependents enrolled, and the dates of their coverage. 

ERIC further encourages the IRS to provide greater flexibility regarding electronic disclosure options.  The letter contends that the proposed regulations limit the ability of plan sponsors to provide the information electronically because they require companies to obtain an individual’s affirmative consent.  ERIC argues that plan sponsors should be allowed to electronically deliver the disclosures, consistent with other health plan documents, as the cost and administrative burden for large employers to obtain and administer the consents would be overwhelming.   

Finally, ERIC urges the IRS to give companies sufficient lead time to comply with the reporting and disclosure requirements once they are finalized, as companies will need to create, test and implement their systems.  ERIC suggests that the IRS provide plan sponsors with at least one year after the regulations are finalized to create systems before they will need to start capturing the data that needs to be reported.

ERIC’s letter can be accessed by clicking on the link below:

ERIC Comment Letter on Employer Reporting Requirements

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For more information:

Ted Godbout
Director, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone:  202-627-1918
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers.  ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families.  ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.