Employer groups and health insurance brokers are advocating for legislation that would simplify Obamacare reporting requirements to be included in a budget package Congress is aiming to pass by March 22.
The Employer Reporting Improvement Act (H.R. 3801) is a key lobbying focus for health insurance brokers who gathered in Washington in late February. This measure received unanimous approval by the House of Representatives in June 2023 and enjoys bipartisan support in the Senate.
The Employer Reporting Act is particularly crucial for smaller companies that have faced challenges defending themselves against false Internal Revenue Service notices alleging hefty penalties for not offering health coverage required by the Affordable Care Act to their employees.
The National Federation of Independent Business has raised concerns about the impact of ACA reporting requirements on its members, with a significant percentage finding them burdensome, according to a 2022 survey.
Companies with 50 or more full-time employees must provide coverage that meets the ACA’s requirements for affordability and minimum essential coverage. Various reporting requirements, including forms like 1094-C and 1095-C, are in place to ensure compliance with the law and avoid penalties.
For 2024, companies failing to provide minimum essential coverage face fines per full-time employee without coverage or receiving subsidized coverage through an exchange.
Preemptive Notices
The IRS sometimes issues penalties prematurely, leading employers on a complicated path of appealing erroneous penalties due to factors like employees having access to coverage through their spouse.
The Employer Reporting Act proposes extending the appeal time period, enacting a statute of limitations for ACA penalties, allowing alternative reporting of dependents’ information, and reducing bureaucratic reporting requirements.
Sens.
The bill’s estimated cost for the 2023-2033 period is less than $500,000, according to the Joint Committee on Taxation’s 2023 report.
Advocates are optimistic about the legislation’s prospects and are working towards its prompt passage through negotiations or end-of-year agreements if necessary.
The goal is to provide relief from burdensome ACA reporting requirements and prevent unnecessary penalties for employers.
Proponents hope the legislation reaches President