ACCORDING TO A SHRM HEALTH CARE SURVEY, 62 PERCENT OF HR PROFESSIONALS POLLED SAID REPORTING REQUIREMENTS WERE THEIR BIGGEST ACA CHALLENGE.

Issue:

While employers diligently work to ensure compliance with the law, the annual reporting requirement is administratively and financially burdensome. According to a SHRM health care survey, 62 percent of HR professionals polled said reporting requirements were their biggest ACA challenge. Employers that do not file an annual report or file inaccurate forms to the IRS run the risk of incurring significant financial penalties. Furthermore, because this data is reported after a coverage year has ended, it cannot be used by state and federal exchanges to verify individual eligibility for a tax credit during open-enrollment season.

Background:

Under the Affordable Care Act (ACA), an individual is not eligible for a tax credit to purchase health care in a state or federal insurance exchange if he or she is a full-time employee and has an offer of coverage from the employer that meets the employer mandate. Individuals who incorrectly receive a tax credit to purchase health insurance on an exchange are required to repay the Internal Revenue Service (IRS). In order to verify compliance with the employer mandate and determine an individual’s eligibility for a tax credit, employers must file an annual report with the IRS and furnish statements to employees on health care plan coverage information.

Outlook:

Representatives Mike Thompson (D-CA) and Adrian Smith (R-NE) and Senators Mark Warner (D-VA) and Rob Portman (R-OH) have introduced H.R. 4070/S. 2366, the Commonsense Reporting Act. This bipartisan legislation would provide employers relief from burdensome reporting requirements, state and federal exchanges with additional data to verify tax-credit eligibility, and individual health consumers with accurate data when purchasing insurance.

SHRM Position:

SHRM strongly supports H.R. 4070/S. 2366, the Commonsense Reporting Act. Employer- sponsored plans are the largest providers of health insurance to individuals (66 percent of the workforce) in the United States. The Commonsense Reporting Act will provide much-needed relief to both employers and employees by modernizing and streamlining the reporting requirements. SHRM urges lawmakers to co-sponsor H.R. 4070 and S. 2366.

Fact-Sheet:

Commonsense Reporting Act Fact Sheet