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IRS struggles to combine PPACA reports

Originally posted September 6, 2013 by Allison Bell on https://www.benefitspro.com

The Internal Revenue Service is still trying to figure out how to combine two new Patient Protection and Affordable Care Act reporting programs.

One of the new programs requires a carrier to tell the IRS and consumers whether it’s providing minimum essential coverage.

The other requires a large employer to tell the IRS whether it’s meeting the “shared responsibility” requirements — the employer mandate — by offering full-time workers affordable coverage with a minimum value. An employer that violates the mandate rules could have to pay a penalty of $2,000 per affected worker.

The IRS will publish the PPACA Section 6055 MEC reporting requirement and PPACA Section 6056 shared responsibility reporting requirement draft regulations in the Federal Register on Monday.

It’s been suggested before that the IRS combine the two programs. But doing so would be complicated, because the programs apply to different entities and will generate different types of information, IRS officials said.

In some cases, the IRS may let large employers use information reported on Form W-2 and information reported to meet the Section 6055 MEC reporting requirements to meet the Section 6056 shared responsibility requirements, officials said.

The IRS is considering letting employers meet the Section 6056 shared responsibility reporting requirements by using a code on the W-2.

Also in the draft, officials:

  • Declined to let employers with fiscal years other than the ordinary calendar year to base Section 6055 or Section 6056 reporting on the fiscal year. Consumers need the coverage information early in the calendar year, officials said.
  • Declined to create a safe harbor from penalties for coverage issuers or employers that violate reporting rules because other parties cause problems. Another provision already offers issuers and employers relief for any errors that are corrected in a timely manner, officials said.
  • Said that the insurer that insures a group health plan, not the group plan sponsor, is responsible for meeting the Section 6055 MEC reporting requirements for the group plan members.