New Employer Health Insurance Reporting Requirement Pushed Back to January 2015

The Patient Protection and Affordable Care Act (PPACA) originally set January 1, 2014 as the effective date for employers to fulfill certain reporting provisions on health insurance coverage offered to employees. The IRS pushed back the date to January 1, 2015 because of its own delay in issuing rules to implement the requirement. Last week, however, the agency announced its proposed rules which, after a period for comments, will take effect on a voluntary basis for 2014, and become mandatory in 2015.

Internal Revenue Code Section 6055 requires employers to report information about the insurance provider including contact information as well as a list of persons covered and for which months.

Internal Revenue Code Section 6056 requires employers of 50 or more full time employees (“large employers”) to report company information, exact number of employees including a list of full time employees with coverage information for each (months of coverage and cost of self-only coverage). The IRS may allow this information to be reported on the Form W-2.

The implementation of these rules in 2015 also triggers enforcement of the “employer mandate” in January 2015. The employer mandate created by PPACA requires large employers to provide health insurance coverage to employees or pay a $2,000 per employee penalty.

The Treasury Department spokesman for these rules, Assistant Secretary for Tax Policy Mark J. Mazur, acknowledged that businesses are concerned about “the complexity of the requirements and the need for more time to implement them effectively.” The President recognizes, he said, “that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers.”