Under the Affordable Care Act, employers are required to report information relating to both the employer mandate and the individual mandate. As a result of these new rules, employers will need to provide information to the government relevant to whether employers and individuals are meeting their responsibilities under these mandates. Employers also will have to provide information that will help employees determine whether their coverage satisfies the individual mandate and whether they would qualify for a subsidy if they were to purchase coverage through a health insurance exchange.
The forms for complying with these rules have not yet been issued, in part because of IRS efforts to minimize the reporting burdens created by the statute. For example, the IRS is designing a single form to meet the requirements to report information for both the employer and individual mandates and is, to a significant degree, modeling the reporting obligation on the familiar income tax reporting obligations, which involve Forms W-2 and transmittals.
Nevertheless, there are nuances that employers will need to consider. For example, information is often collected on a plan-wide basis, but certain reporting obligations (relating to the employer mandate) rest with each common law employer. Consequently, a plan that covers the employees of a number of affiliated employers will need to be prepared to provide information on an employer-by-employer basis. Employers may need to modify their information systems to capture the required information, which (in addition to certain basic employer information) will include information about the coverage made available and actually provided to each employee for each month of the year, as well as the employee contributions required for the lowest cost coverage available.
The regulations address a number of specific issues. These issues include the efforts that employers should make to obtain relevant taxpayer identification numbers for employees and dependents, the manner in which certain governmental units may organize their reporting responsibilities, the rules that apply to multi-employer plans, the measures to be taken when certain information is to be provided by an insurer, and the situations in which electronic reporting will be required or permitted.
The reporting requirements will apply to coverage in 2015 for reports due in 2016, but it may be prudent to lay the groundwork (especially if systems changes are required) for gathering the information needed to meet the reporting obligations this year.