Employer Obligation to Report Survives First Legislative Proposal

March 14, 2017

Since the March 6th release of Republican’s Affordable Care Act replacement plan, otherwise known as the American Health Care Act, the proposed legislation has been subjected to criticism seemingly outweighing its praise. For employers currently finalizing their 2016 IRS reporting requirements, one hope may be that the year-long tracking, reporting, and data collection essential to this process would be eliminated. However, a review of the proposed legislation suggests that employer obligations to report may be far from over. 

As it currently stands, while the House’s proposal would eliminate the individual mandate, a new system of providing tax credits and incentivizing individuals to not let their coverage lapse would be created. For the IRS to monitor this information, employers would need to report individuals’ coverage in ways similar to those outlined by the ACA. At present, the ACA requires that employers with 50 full-time employees offer health insurance to those full-time employees or pay a penalty. Although the proposed legislation would eliminate this penalty, the employer’s obligation to annually report employees’ health insurance information would remain. 

Additional reporting requirements have also been proposed. For example, employers would be required to report information about the coverage offered to employees on their W-2s. Employers would also be obligated to provide individuals seeking refundable tax credits with a written statement indicating whether such individuals are eligible for coverage. One notable difference between these reporting requirements and those issued under the ACA are that this policy would apply to all employers, not just those with 50 or more employees. 

As of Thursday, March 9th, the American Health Care Act had passed through two House committees. A vote by the House is anticipated by the end of this month. Once voted upon, the bill will move to the Senate, where many senators, such as Florida’s Senator Marco Rubio, share the sentiment that without major changes, the House’s bill will not win a Senate majority. Amidst such uncertainty, employers should note that their continued ACA compliance is currently required by law and that their efforts will help them prepare for reporting changes and requirements, should they occur.

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