Are Employer Reporting Requirements Going Away With Repeal & Replace?

Many employers are hanging their hat on the employer reporting requirements (i.e. Form 1095-C) going away under the changes proposed by the Trump Administration. The current legislative proposal in the American Healthcare Act (AHCA) repeals the employer mandate to offer coverage.

So under this proposal, the employer doesn't need to report information to the IRS anymore … right? Well, unfortunately, likely not.

In the AHCA, there are tax credits proposed for individuals if they are not offered coverage through an employer-sponsored plan. To that end, the IRS will need to know whether or not an individual was offered coverage through an employer-sponsored plan and unfortunately, the IRS won’t trust taxpayers to be honest, they will want to be able to verify this information based on information reported by employers.

Despite the fact that employers may no longer be required to offer coverage under the AHCA proposal, they are likely going to have to report to the IRS whether or not they actually offered coverage or not.

The IRS can then use this information and cross reference it to individual 1040 tax returns to verify that individuals claiming a tax credit are eligible to do so. In thinking this through, it may become incumbent upon all employers, not just ALEs (Applicable Large Employers) currently subject to the employer mandate, to report offer of coverage information to the IRS. As always with IRS reporting, penalties will apply if the employer does not report in a timely fashion, as well as if the employer does not report complete and accurate information.

So what are employers to do today? The simple answer is, “Stay the course.”

The ACA is the law of the land and as such, employers need to ensure they are protecting their company from potential penalties for not offering coverage, not offering affordable coverage and for not reporting offer of coverage information to the IRS on form 1095-C. In an article on “HR Morning”, Would ACA reporting requirements disappear with repeal?, confirms this: [the AHCA] “require some means of continuing to track when employees have and haven’t been offered coverage through their employers”.

Integrity Data continues to ensure their healthcare reform solution will meet the needs of our customers today and in the future as changes to laws and regulations occur. Keep watching our website and blog posts for more information out of Washington, DC over the coming days and weeks and months to stay informed as to how these healthcare changes will affect your organization.

If you don’t currently have a solution that eases the burden of complying with the ACA, be sure to check out our ACA compliance page and attend one of our regular webinars for information on what you need to be doing now to mitigate penalty risk to your organization.