IRS Proposes Changes To Ease ACA Reporting

September 17, 2015 Robert Sheen Regulations, Reporting

The Internal Revenue Service said it will propose a number of changes in the regulations on reports related to the Affordable Care Act. All of the proposed changes will have the effect of easing reporting obligations of employers and insurance companies.

The agency issued Notice 2015-68, which details the proposed regulations under § 6055 of the Internal Revenue Code. Near the end of the 11-page document is a proposal to give relief to employers who could face penalties for filing problems.

Employers may be subject to penalties for failing to file correct information returns or furnishing correct payee statements. Currently the IRS will not impose penalties on those who have made “good faith efforts to comply,” but some employers have expressed concern about how that will be interpreted, especially in respect to obtaining a correct taxpayer identification number (TIN) from an employee or family member.

The proposed rule would exempt the employer from penalties for failing to report a TIN if they ask for that information when an individual is first enrolled, or at the next open enrollment period if the employee is already enrolled, and make a second request “at a reasonable time thereafter,” and a third request by December 31 of the year following the initial request.

In addition, an employer is not required to request a TIN from an individual whose coverage has been terminated.

Other proposed changes include allowing filers to truncate both employee and company TINs in reports, changes in the report of catastrophic health insurance plans, and allowing electronic delivery of ACA statements to expatriate employees living abroad.

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