On September 5, 2013, the Departments of Treasury and the Internal Revenue Service (IRS) issued proposed regulations on the information reporting requirements related to the individual mandate and the employer mandate provisions of the Patient Protection and Affordable Care Act (PPACA).

Minimum Essential Coverage Reporting

This regulation provides guidance on how insurers and employers must report to the IRS and to covered individuals whether their health plan provides minimum essential coverage, as required by the individual mandate.

This reporting requirement will assist the IRS in determining whether individuals are complying with the individual mandate, and also whether they are eligible for a premium tax credit to use toward purchasing coverage on the Marketplace/Exchange because they lack minimum essential coverage.

Voluntary reporting is encouraged for the 2014 calendar year, which would be done in early 2015. However, no penalties will be assessed until 2016 when the reporting for 2015 is due.

Information Reporting for Large Employers

This regulation provides guidance to employers with 50 or more full-time or full-time equivalent employees who are subject to the employer mandate. This regulation defines how employers must provide information to the IRS and to their employees regarding the health care coverage they offer to full-time employees.

This reporting will be used to determine whether large employers are complying with the employer shared responsibility requirement and will also help identify individuals who are not eligible for premium tax credits because they have been offered coverage by their employer.

The employer mandate was originally scheduled to take effect in January 2014. However, implementation has been delayed to 2015, partially to allow more time to define these reporting requirements. The first reports are due in early 2016 for the 2015 calendar year.

Proposed Reporting Simplification

The proposed rules include a variety of proposals the IRS is considering to streamline information reporting. There is a 60-day comment period to allow employers and insurers to provide feedback to the IRS on these proposals with the goal of further simplifying the reporting requirements.