The HealthSmart Focus newsletter provides information on legislative, legal and regulatory changes affecting the healthcare industry. Focus is researched and written by Sarah A. Bittner, Associate General Counsel for HealthSmart Holdings, Inc., and is published for the benefit of our clients, partners and other interested parties. This newsletter is designed to communicate general information regarding employee benefit matters. Nothing in this newsletter shall be deemed to constitute legal opinions or legal advice.
IRS Issues Pay-or-Play Transition Relief for 2014
IRS Notice 2013-45 provides transition relief for 2014 from the employer shared responsibility provisions and certain information reporting requirements applicable to large employers, self-insured employers, and insurers. The transition relief will provide for additional time for the agencies to simplify the information reporting obligations, as well as provide additional time for employers to adapt their health coverage and reporting systems. The Notice confirmed that these requirements will not be fully effective until 2015.
Information Reporting Rules to be Issued This Summer
Section 6055 of the Affordable care Act (ACA) requires annual information reporting by health insurance issuers, self-insuring employers, government agencies, and other providers of health coverage. Section 6056 requires annual information reporting by applicable large employers relating to the health insurance that the employer offers (or does not offer to its full-time employees). Under the transition relief guidance, the IRS clarified that proposed rules for the information reporting provisions will be published summer. Employers and insurers are encouraged to voluntarily comply with the reporting provisions for 2014 in preparation for the 2015 effective date. However, no penalties will be assessed for failing to comply with these provisions in 2014.
Pay-or-Play Rules Delayed
Under the Employer Shared Responsibility Provisions, applicable large employers must offer affordable, minimum value health coverage to full-time employees or a tax may apply if one or more of its full-time employees receives a premium tax credit. Because the Information Reporting Rules are integral to the administration of the Employer Shared Responsibility Provisions, employers will not have the information necessary to determine whether a taxed is owed under Section 4980H. As such, the Notice clarifies that the transition relief from the Information Reporting Rules in 2014 will make it impractical to determine which employers owe shared responsibility payments. As such, no employer shared responsibility payments will be assessed for 2014.
The Notice reiterates that individuals will continue to be eligible for the premium tax credit. Additionally, the transition relief has no impact on the effective date of other ACA provisions, including the individual mandate.
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