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National Restaurant Association - IRS releases final paperwork rules for employers under ACA

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IRS releases final paperwork rules for employers under ACA

New information-reporting rules for many businesses and their insurers are on their way under the Affordable Care Act -- and with less than 10 months to go before data-tracking is supposed to get underway, the impact on affected businesses could be overwhelming, the National Restaurant Association said today.

The IRS today issued final regulations spelling out Sections 6056 and 6055 of the Internal Revenue Code. These new provisions are part of the ACA, and will require many employers to turn over significant data to the IRS and to employees starting in early 2016. Data-tracking must begin Jan. 1, 2015.

Access the Treasury Department's fact sheet, plus the Section 6056 and Section 6055 regulations, which are scheduled to be published in the Federal Register March 10. Find the NRA's statement here.

The rules are aimed at helping the IRS enforce the health care law’s employer and individual mandates, including allowing the agency to calculate and assess monthly penalties against large employers who fail to offer qualifying health care coverage to full-time employees. Federal and state agencies will also use the Section 6056/6055 data to determine which individuals are eligible for federal tax help to buy health care plans on exchanges. 

Employers have been waiting for the final rules for months. As a leader of the Employers for Flexibility in Health Care (E-FLEX) Coalition, the National Restaurant Association last year asked the IRS to give employers maximum flexibility in how they report data.

The final regulations offer some options aimed at streamlining the process for employers, but the requirements still appear daunting. To simplify, the IRS said it’s offering a form to allow employers and their insurers to provide Section 6056/6055 information on the same consolidated form. The IRS also said in limited cases – where employers offer qualifying health plans to full-time employees at a cost that falls below 9.5 percent of the federal poverty level, or about $1,100 a year – employers may qualify for simplified reporting.

NRA disappointed in the regulations

NRA President and CEO Dawn Sweeney said in a statement released March 5 that the NRA is disappointed in the regulations.

“We asked the IRS to offer options for a truly streamlined reporting process, taking into consideration the employer reporting requirements holistically,” Sweeney said. Instead, she said employers will face an “overwhelming and extensive set of requirements.” The data-collection process will be massive, likely requiring new administrative resources and technology upgrades, Sweeney said.

“Our industry has never needed to track such a massive outflow of employee data,” Sweeney said. She said the prospect of putting systems in place by the end of the year to collect, maintain and protect new data continues to be a great concern for restaurateurs.

Reporting rules at a glance

  • What the rules require: Section 6056 requires covered employers to certify that they’ve offered “minimum essential coverage” to full-time employees. Among other information, the 6056 reports will generally require data on the number of full-time employees each month and the months during which employees were offered coverage. Section 6055 requires insurers and self-insured employers to file data about health care coverage.  
     
  • Who’s covered: The ACA’s Section 6056 reporting rules apply to businesses that employ 50 or more “full-time-equivalent” employees. The Section 6055 reports must be filed by any entity that offers a health plan, such as self-insured employers, health insurers and others.
     
  • When the reporting rules take effect: The first 6055/6056 returns will be due in early 2016, based on data tracked in 2015. Statements must be filed with employees by Jan. 31, 2016, and returns must be filed with the IRS by the end of February (for paper filers) or end of March (if filed electronically).
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