Bipartisan Proposal to Revamp Employer Reporting Requirements

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To ensure compliance with the employer responsibility requirement and to assist verification of compliance with the individual responsibility requirement, the ACA requires large self-insured employers and insurers who cover employee benefit plans to file reporting forms annually with the Internal Revenue Service, and to annually provide full-time employees with statements regarding their coverage. These reports can also be used to verify whether individuals who apply for premium tax credits are in fact ineligible for affordable minimum-value coverage, which would disqualify them from assistance.

(The IRS has recently released the forms used for this reporting: the final 2017 1095-B insurer reporting and 1095-C large employer reporting forms, as well as the 1095-A reporting forms used by marketplaces to report individual coverage.)

These reporting requirements are quite burdensome for employers. They also are not very helpful for verifying advance premium tax credit (APTC) eligibility, as they are not filed until after the end of a year in which an employee received APTC.

Republican ACA repeal proposals considered through the 2017 budget reconciliation process would have repealed the employer responsibility penalty, but, presumably because of the Byrd Rule which limits the scope of budget reconciliation legislation, would not have repealed the reporting requirements. That can only be done through bipartisan legislation—hence the Portman/Warner proposal.

The bill would first require the Internal Revenue Service, in coordination with other federal agencies, to establish, effective January 1, 2019, a voluntary reporting program; this would permit an employer to, not later than 45 days before the start of their annual open enrollment period, voluntarily report to the IRS

• whether it is offering minimum essential coverage to its full-time employees (or to part-time employees, dependents, and spouses);
• whether the coverage meets ACA minimum value and affordability requirements;
• whether the employer reasonably expects to be liable for the employer responsibility penalty;
• the months for which coverage is available; and
• any waiting periods that apply to coverage.

The IRS would share the information gained through these reports with the exchanges and federal data hub, which could use it for determining eligibility for ATPC and cost-sharing reduction payments. The exchanges could follow up with employers if they needed additional information. Employers would provide updates to the data hub if the coverage they offered changed. Exchanges would also notify employers if any of their employees enrolled in coverage or dropped coverage during a year.

Employers that filed these prospective returns would be deemed to have met the reporting requirements of the ACA if they furnish each employee whose name has been provided by the exchange as having exchange coverage with a statement as to the coverage the employer had offered, and file a copy of that statement with the IRS. Employers could contract with third-party contractors to handle their filings.

The bill would give the IRS and HHS access to the National Directory of New Hires for purposes of premium tax credit and employer responsibility verification, and would give employees access to their employer’s taxpayer identification numbers.

The bill would allow employers to use names and birthdates of employee dependents for identification rather than taxpayer identification numbers. It would also allow employers and insurers to deliver statements electronically to employees who have previously consented to electronic delivery of information unless the consent was revoked.
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