The Retail Industry Leaders Association (RILA) issued the following statement in response to the Ways & Means Joint Hearing on the Verification of Income and Insurance Information Under the Affordable Care Act. Final employer reporting requirements issued by the Internal Revenue Service (IRS) require retailers to provide the IRS with a tremendous amount of employee information on a monthly and annual basis. Compliance for retailers will be complex and deeply burdensome, and will ultimately flood the IRS with a mass of information of dubious value. Additionally, the information required to be collected does not create an effective way to administer premium assistance tax credits to individuals or to minimize the prospects of employees being subjected to repayment of advanced premium assistance tax credits in cases in which Exchanges made an inaccurate eligibility determination.
"Retailers remain concerned that individuals may mistakenly be approved for tax credits through the healthcare Exchanges based upon inaccurate information about their employer-sponsored coverage satisfying the law's employer mandate.
"There are ways to ease the transition to compliance for individuals, employers, Exchanges and the IRS. Pre-certifying an employer plan would lessen the confusion of Exchange tax credit eligibility and lessen the likelihood of individuals being on the hook for incorrect tax credits. RILA supports the idea of enabling employers to pre-certify on a government website or portal that at least one of their plans meets the employer mandate," said Christine Pollack, Vice President of Government Affairs.
Background:
The Internal Revenue Service (IRS) released the final rules for the ACA's reporting requirements on March 5. Under these requirements, employers must compile monthly and report annually numerous data points to the IRS and their own employees. This data will be used to verify the individual and employer mandates under the law, and administer premium tax credits for coverage in Exchanges/Marketplaces.
Over the last several years, RILA noted to the Treasury Department and IRS numerous times that the collection and remittance of the data required under these reporting requirements will be an extremely daunting task for retailers. Unfortunately, the final rules did little to streamline this administratively complicated and burdensome system. While the rules allow for combined reporting for these requirements, they do nothing to ease the burdens of the amount of data that is required to be collected and reported. RILA and the E-Flex Coalition provided extensive policy recommendations to the Administration but the IRS chose not to incorporate these ideas. As such, RILA is advocating for legislative solutions on Capitol Hill to amend these requirements.
A less expansive approach to information reporting can achieve the same ends with fewer burdens to employees and employers. RILA and the E-FLEX Coalition strongly support regulatory and legislative changes to the ACA's information reporting requirements that would:
- Give employers the option of prospectively reporting to the IRS information about coverage offered to employees to help increase the accuracy of determinations of eligibility for Exchange tax credits on the front end of the process and reduce the volume of reporting on the back end
- Replace much of the year-end reporting by employers with more streamlined reporting methods such as a general certification process or an exceptions-based reporting system based on the number of employees who receive tax credits
- Protect privacy by eliminating the requirement for employers to collect and remit dependents' Social Security numbers