Benefits lobbying groups in Washington are urging the White House to minimize burdensome employer reporting requirements -- especially as the Affordable Care Act undergoes changes under a new administration.
The groups worry that employers would still face significant reporting requirements, and exposure to penalties under the ACA if they fail to meet those reporting requirements, even in the absence of the ACA's employer mandate.
“If the mandate is repealed, we wouldn’t want to see penalties for a provision that is no longer in effect,” says Kathryn Wilber, the American Benefits Council’s (ABC) senior counsel for health policy.
That scenario could unfold if repeal legislation wasn’t retroactive to 2015, the year when employers first became subject to mandate-related information reporting requirements.
“In the absence of the ACA framework, there is no reason to retain complex and costly requirements that are specifically designed to implement that law,” according to the ABC.
The ultimate fate of the ACA in Congress remains an open question as the political
dynamics among hard-line members anxious to pull the plug on the ACA entirely before devising a replacement, and the more cautious repeal-and-replace advocates, remain fluid.
Employer mandate doomed?
But last month’s Congressional action allowing pieces of the law with revenue implications to be eliminated by a simple majority vote through the budget reconciliation process could usher in the demise of the employer mandate because it would be difficult for Democratic members to block that move.
The federal revenue impact of the employer mandate’s tax penalty provisions for employers that don’t comply with it is what makes that piece of the ACA fair game in the budget reconciliation legislative process.
Wilber notes that the last time Republicans voted to repeal the ACA in 2016, the legislation didn’t address reporting requirements under Internal Revenue Code sections 6055 and 6056. It became a moot point when president Obama vetoed the measure, however. But that history is what has given the ABC pause about ACA-repeal scenarios in the current session of Congress.
The ABC on Tuesday sent a letter to key members of Congress and to Andrew Bremberg, the director of President Trump’s Domestic Policy Council, calling for easing of employers’ reporting burdens under the ACA.
“We urge the administration to take immediate steps to minimize certain ACA requirements that impose significant costs and complexity on purchasers of health insurance,” wrote ABC President James Klein.
Seeking a safe harbor
The ABC believes that can be accomplished “through the issuance of a limited non-enforcement safe harbor,” for which a recent precedent exists — the IRS decision to delay enforcement of the mandate in 2014.
Klein asked not only for the elimination of reporting provisions, but the employer mandate itself. However, ABC members are large employers that have traditionally sponsored health plans, and are likely to continue doing so with or without an employer mandate.
A letter similar to the ABC’s was dispatched a week earlier by the National Coalition on Benefits.
Both letters urged federal agencies that regulate ACA compliance to take full advantage of the executive order President Trump issued hours after taking the oath of office on Jan. 20. That document called upon agencies to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden” on, among other entities, employers.
“We ask that you use the full authority vested in the executive branch to relieve employers of the burdens imposed on them by the ACA,” requested the National Coalition on Benefits.
Timing is of the essence. The March 2 deadline for large self-insured employers to provide IRS 1095-C forms to employees is right around the corner. So to is the March 31 deadline for electronic filing of IRS Forms 1094 and 1095.
