In a regulatory comment letter filed today, the Partnership for Employer-Sponsored Coverage (P4ESC) congratulated Treasury Secretary Yellen on her confirmation and urged her to provide employers with COVID-related safe harbor relief and long-term reform to the Affordable Care Act (ACA) tax compliance information-reporting rules. The letter was filed in response to Internal Revenue Service (IRS) Notice 2020-76, Transition Relief Related to Health Coverage Reporting Required by Sections 6055 and 6056 for 2020. The letter was also addressed to IRS Commissioner Charles Rettig.
Through this filing, P4ESC reiterated its request for COVID-related safe harbor relief under IRS Code sections 4980H, 6055 and 6056, pertaining to the law’s employer mandate and annual information-reporting rules. The Coalition further outlined long-term policy solutions to address on-going employer burdens under sections 6055 and 6056 information-reporting requirements.
The full text of the letter is available HERE and excerpts are as follows.
As the pandemic rages on we strongly urge the new Administration to: 1) provide employers with COVID-related relief under the ACA requirements in the very near term, and 2) reform the information-reporting requirements to implement a consumer-friendly process for individuals, and a less burdensome and costly compliance process for employers, the federally facilitated and state-based Exchange systems and the Internal Revenue Service (IRS) alike.
The following is an outline of information-reporting requirement reform policies we would like implemented. These reform ideas were developed from employer compliance and operational feedback. We have conveyed these ideas to federal regulators and lawmakers on Capitol Hill over the last decade and know that the beginning of a new Administration is the perfect time to act.
Revise the list of data requirements under sections 6055 and 6056 to be relevant and practical.
Decouple information reporting for sections 6055 and 6056 from Form 1095-C.
Enable applicable large employers (ALEs) to prospectively report to the IRS relevant data items about the type of coverage offered to their workforce of full-time employees prior to open enrollment season in the Exchanges.
Eliminate the requirement that self-insured employers send an individual 1095-C form to all enrolled employees.
Require review of ALE-filed data before a 226-J penalty notification letter is sent.
Provide employers with 90 days, rather than 30 days, to appeal a 226-J tax penalty letter for any tax compliance year.
Work directly with HHS and state-based Exchanges to verify employer information during open enrollment to determine individual premium tax credit eligibility.
Employers want the information-reporting requirements under sections 6055 and 6056 and the Exchange eligibility verification process to run efficiently and effectively so their employees are not subject to the costly repayment of premium tax credits and the business is not subject to possible violations under the employer shared responsibility. A comprehensive reevaluation of the compliance requirements and information-sharing under the ACA is long overdue. P4ESC stands very ready and able to help the new Administration revise the processes.