By Jerry Geisel, Crain News Service
WASHINGTON (Sept. 9, 2013) — Newly proposed Internal Revenue Service (IRS) and Treasury Department healthcare reform regulations would ease the amount of employee plan coverage information employers would have to report to federal regulators.
Under the proposed rules, released Sept. 5, employers would not be required to report cost information related to family coverage.
In addition, employers would have to report how much of the premium employees will have to pay for single coverage only.
Limiting that reporting requirement to single coverage is appropriate, the IRS and the Treasury Department said, because a healthcare reform law affordability test applies only to single coverage—not family coverage.
Under that test, if the premium paid by employees for single coverage exceeds 9.5 percent of household income, the employee is eligible for a federal premium subsidy to purchase coverage in a public insurance exchange. If the employee uses the subsidy, the employer may be liable for a $3,000 penalty.
No penalty is assessed regardless of how much the employer charges for family coverage, making the need to collect such information unnecessary, regulators said.
"Because only the lowest-cost option of self-only coverage offered under any of the enrollment categories for which the employee is eligible is relevant to the determination of whether coverage is affordable—and thus to the administration of the premium tax credit and employer shared responsibility provisions—that is the only cost information proposed to be requested," according to the proposed regulation, which is scheduled to be published in the Sept. 9 Federal Register.
While regulators have reduced the amount of information to be reported, "it is only limited relief. There still will be a massive amount of work to meet the reporting requirements," said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
The proposed rules, though, could pose problems in other areas. For example, employers would be required to report tax identification numbers of employees' dependents.
Employers do not always have such information for every dependent, said Amy Bergner, managing director of human resources in Washington for PricewaterhouseCoopers L.L.P.
This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.