ERIC News Release
Richard Stover, Principal and Consulting Actuary of Buck Consultants (a Xerox Company), testified today on behalf of The ERISA Industry Committee (ERIC) before a joint Treasury Department and IRS hearing on proposed regulations under the Affordable Care Act on information reporting by large employers on health coverage.
Stover underscored a series of recommendations ERIC made to Treasury and IRS in its comment letter urging the agencies to further revise and simplify the proposed reporting requirements because the suggested methods generally are not appropriate for most large employers.
“Simply put, the simplifications suggested in the proposed regulations are not appropriate for large employers and would entail the diversion of a not insignificant portion of their financial and administrative resources that is not commensurate with the benefit received by any party,” Stover testified.
He noted that participants already receive the vast majority of the information required to be provided under Internal Revenue Code sections 6055 and 6056, and they are often overwhelmed by all of the disclosures that must be provided to them.
“We suggest that instead of this elaborate, expensive, and cumbersome reporting structure, that the government shift its focus from individualized reporting to one that will permit large employers merely to certify that they have covered 95% of their full-time employees, thus satisfying their obligations under Code section 6056,” Stover said.
ERIC further recommended that an employer be given the option to satisfy the requirement for the section 6055 reporting by posting a notice on the company’s website that employees may obtain specific coverage information upon request.
If this suggested approach to reporting under section 6055 is not accepted, Stover recommended that employers should then be permitted to use a greatly simplified reporting regime whereby companies would provide to the IRS and covered employees information about the employer, the names of employees and dependents enrolled, and the dates of their coverage.
Stover also testified that the IRS should provide greater flexibility regarding electronic disclosure options. He explained that if an individual has already provided consent to electronic delivery, the plan sponsor should not be required to obtain their consent again for section 6055 and 6056 purposes.
In reviewing ERIC’s other key recommendations, Stover urged the IRS to give companies sufficient lead time to comply with the reporting and disclosure requirements once they are finalized, as companies will need time to create, test and implement their systems. He suggested 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.