Employer Reporting Continues Under House Republican Leadership Proposed Bill
On March 6, 2017, the House Leadership recently unveiled its proposed bill called “American Health Care Act.”Among its provisions, the bill calls for termination of the issuance of premium tax credits starting 2020, which is still almost three years away. Putting aside the questionable survival of this bill given the loud criticism of it from both Republican and Democratic lawmakers alike, what happens to the employer reporting requirements under the bill?
Under IRC Section 6056, employers are obligated to report the healthcare coverage the offer to their employees. The proposed bill does not repeal Section 6056.
The reporting requirement of Section 6056 ensures that each individual who obtained premium tax credits (PTC) through one of the Healthcare Exchanges but did not in fact receive an offer of qualifying healthcare coverage through his/her employer. A PTC would be issued if the individual did not receive an offer of “minimum essential coverage” or, even though such an offer was received, the coverage was not “affordable” and/or did not meet “minimum value.”
The issuance of the PTC would need to be reconciled with employer reporting. Through employer reporting, the IRS would be able to determine if the individual who received PTCs was entitled to them because his/her employer had not made an offer for qualifying healthcare coverage and thus justifying the PTCs.
With the PTCs set to sunset on December 31, 2019 under the proposed bill, the employer reporting will remain necessary until thereafter.
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