This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Treasury Issues Proposed Rules for Information Reporting by Employers and Insurers Under the Affordable Care Act
U.S. Department of the Treasury
September 5, 2013
The ACA provides for information reporting (under Internal Revenue Code section 6055) by insurers, self-insuring employers, and other parties that provide health coverage. It also provides for information reporting (under Code section 6056) by employers that are large enough to be subject to the employer shared responsibility provisions regarding the health coverage they offer their full-time employees. These proposed regulations reflect comments received and an ongoing dialogue with stakeholders, including plan sponsors, many of whom already offer their full-time workforce coverage far exceeding the minimum employer shared responsibility requirements. Nearly 95 percent of employers with more than 50 full-time employees already offer coverage to their employees.
The proposed rules issued today describe a variety of options to potentially reduce or streamline information reporting, such as:
* Replacing section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.
* Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.
* Allowing employers to report the specific cost to an employee of purchasing employer-sponsored coverage only if the cost is above a specified dollar amount.
* Allowing self-insured group health plans to avoid furnishing employee statements under both section 6055 and section 6056 by furnishing a single substitute statement.
* Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.
* Permitting health insurance issuers to forgo reporting under section 6055 on individual coverage offered through a Marketplace because that information will be provided by the Marketplace.
* Permitting health insurance issuers, employers, and other reporting entities under section 6055 to forgo reporting the specific dates of coverage (instead reporting only the months of coverage), the amount of any cost-sharing reductions, or the portion of the premium paid by an employer.
The statute calls for employers, insurers, and other reporting entities to report, among other things:
For section 6055:
* Information about the entity providing coverage, including contact information.
* A list of individuals with identifying information and the months they were covered.
For section 6056:
* Information about the applicable large employer offering coverage (including contact information for the employer and the number of full-time employees).
* A list of full-time employees and information about the coverage offered to each, by month, including the cost of self-only coverage.
Once the final rules have been published, reporting entities will be encouraged to voluntarily implement information reporting in 2014 (when reporting will be optional), in preparation for the full application of the reporting provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.
Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans:
Information Reporting of Minimum Essential Coverage:
Here it is folks. These are the proposed ACA rules on reports that insurers and employers must file with the IRS – rules that proved to be so complex that the Obama administration deferred for a year the requirement that these reports be filed. Without these reports, the employer mandate could not be enforced. Though this announcement is about the simplification of the rules, that’s not the real story here.
When the Act was crafted, it was recognized that health insurance and health care was now so expensive that a majority would require subsidies for insurance premiums and out-of-pocket expenses. It was also recognized that plans would have to provide a defined set of minimal “essential health benefits.” It was also recognized that many individuals would not buy health plans for themselves unless they were threatened with a financial penalty for failing to do so.
It was decided that the Internal Revenue Service was best suited to administer these subsidies and penalties since they already had income information that would establish eligibility for the income-indexed subsidies. They were also in a position to use the tax system to assess penalties for non-compliance. But there are so many variables that the rule making process was overwhelmed. Even these new rules issued yesterday are not yet final and are open to public comment.
If you just glance at the few changes to simplify the rules (listed above), you will see that even they are quite complex. By the time that the multitude of variables for each individual are taken into consideration, you will see that the bureaucracy is living up to its reputation for complexity that induces intolerable frustrations. This isn’t even necessary. This system is yet another administrative nightmare in a health care system that is unique in all the world for its profound administrative waste.
If you are masochistic and want to research this yourself, here are some resources. Sec. 1502 of the Affordable Care Act amends Part III of Subchapter A of Chapter 61 of the Internal Revenue Code of 1986 by adding Subpart D – Sec. 6055 on the reporting of health insurance coverage. Sec. 1514 of the Affordable Care Act amends Subpart D that was just added by Sec. 1502, by inserting after Sec. 6055 the new section – Sec. 6056. So look up Sec. 1502 and Sec. 1514 in the Affordable Care Act. The newest proposed rules, which are the subject of the Department of the Treasury release on simplification of the rules (reported above), are available now online and will be formally published in the Federal Register on September 9, 2013. The proposed rules, “Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans,” are 72 pages (link above). The proposed rules, “Information Reporting of Minimum Essential Coverage,” are 42 pages (link above).
Think of how much simpler it would be if we established a single national fund to pay for all reasonable health care for everyone and then funded it with progressive taxes. The tax system is already in place. We could tweak it so that it is even more equitable. Just think of the administrative simplification that we could have, as opposed to the exceedingly meager changes announced yesterday in the highly complex system established by ACA.
Yes, the more we see of the implementation of the Affordable Care Act, the more we realize that a single payer national health program is an imperative. All we have to do is fix Medicare so it works better, and then include everyone.
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