Sept. 6—The IRS has issued proposed rules outlining details of the employer mandate. Problems in developing those rules were blamed for the one-year delay in the mandate’s effective date.

The IRS issued two rules Sept. 5 implementing the Affordable Care Act requirement that large employers offer qualifying insurance to their full time workers. That mandate’s start was delayed in June from January 2014 to January 2015.

The first rule specified the information about employers’ insurance coverage that they must provide to both the IRS and their employees. The second rule specified information that employers must provide to workers that employees can use to show the IRS they have qualifying minimum coverage and avoid tax penalties under the new requirement starting in 2014 that nearly every American have qualifying health insurance.

The Obama administration’s delay in the employer mandate aimed to resolve outstanding business concerns with the requirement.

Business groups responded cautiously as they continue to analyze the new rules.

“Retailers are not interested in being overly burdened by bureaucratic red tape or time-wasting, duplicative reporting requirements,” Neil Trautwein, vice president of the National Retail Federation (NRF), said in a written statement. “NRF commends the administration for taking positive steps towards making needed accommodations.”

In a release describing the proposed rules, the IRS emphasized the “variety of options to potentially reduce or streamline information reporting” in the rules. 

For instance, the rule would replace a requirement in the law on employee statements with using W-2 forms to report offers of employer-sponsored coverage to employees, spouses, and dependents. The rules also eliminate the need to determine whether particular employees are full-time—as defined by the ACA—if qualifying coverage is offered to all potentially full-time employees. 

Self-insured group health plans could use a single filing on employees’ coverage, instead of two separate statements in the law. Self-insured employers also would have more limited reporting if they offer no-cost coverage to employees and their families.

Under the proposed rules, health insurance issuers will not have to report on individual coverage offered through an insurance marketplace, or exchange, because that information will be provided by the marketplace. Health insurers, employers, and other “reporting entities” will have to report the months of coverage (instead of the specific dates) but not the amount of any cost-sharing reductions, or the portion of the premium paid by an employer. 

During the mandate delay, “The IRS is encouraging voluntary reporting by employers and insurers subject to the requirements for 2014,” Timothy Jost, a professor in the Washington and Lee University School of Law and an ACA expert, said in a blog post on the rules. 

Jost also highlighted a provision in the proposed rules that allowed entities required to report minimum essential coverage to use birthdates rather than Social Security numbers for dependents if they are unable to secure the Social Security numbers after reasonable efforts.

Publication Date: Friday, September 06, 2013