Affordable Care Act’s Reporting Requirements And Employer Mandate Postponed Until 2015; New IRS Guidance Released

by Carlton Fields

On July 2 the Obama Administration announced delays of the Patient Protection and Affordable Care Act’s (“ACA”) mandatory employer and insurer reporting requirements, and the requirement that all but the smallest employers offer medical coverage to their employees or pay a fine known as the “shared responsibility” payments.

Additionally, on July 5, the Administration changed the requirements regarding the process by which state online insurance marketplaces will verify income and eligible health coverage status for those applying for subsidized coverage.

Reporting Requirements and Shared Responsibility Payments under ACA

Under ACA’s “shared responsibility” payment provisions, employers with 50 or more fulltime employees (including fulltime equivalents) must offer health care coverage to all employees who work an average of 30 hours per week or more in a month, or pay penalties. This requirement is commonly referred to as the “employer mandate.”

ACA also imposes new federal tax reporting requirements under Internal Revenue Code sections 6055 and 6056 (added by ACA sections 1502(a) and 1514(a), respectively) on large self-insured employers (i.e., employers with a combination of 50 or more fulltime employees and fulltime equivalents).

Citing the complexity of reporting requirements by insurers and employers, the Administration announced that these reporting requirements, which were originally scheduled to take effect January 1, 2014, are now delayed until 2015. Additionally, the employer mandate will be delayed until 2015 since the reporting requirements delay will make it impractical to determine which employers owe shared responsibility payments for 2014.

website posting by Mark J. Mazur, assistant secretary for tax policy at the U.S. Department of the Treasury, indicates that the delay "is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees."

Additionally, the Administration has decided to roll back requirements for new state online insurance marketplaces to verify the income and health coverage status of people who apply for subsidized coverage. The regulations were contained in a 606-page rule that the Health and Human Services Department published on July 5, 2013.

State exchanges now have until 2015 to begin checking an applicant’s employer insurance status. The delay also allows for random income eligibility checks during the verification process, instead of comprehensive checks:

“For income verification, for the first year of operations, we are providing (state and federal) exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.”

Marketplaces to be operated by the federal government in 34 states will still make random checks to verify applicant insurance status in 2014.

Individuals caught lying about their personal information could face a penalty of up to $25,000 and have to pay back the subsidies on their next filing.

Impact of Delay

On July 9, IRS released Notice 2013-45, which provides formal guidance describing transition relief in a question-and-answer format. The guidance addresses: (1) when rules will be published regarding Code Section 6055 and Code Section 6056 information reporting; as well as how these provisions will apply to 2014; (2) what the 2014 transition relief for Code Sec. 6056 information reporting means for application of the employer shared responsibility provisions for 2014; and (3) whether there is an effect on employees’ access to the health insurance premium tax credit.

Significantly, transition relief is limited to the information reporting requirements and employer shared responsibility payments. It is not intended to delay the “individual responsibility” payment under Code section 5000A, nor any other provision of the ACA.

Insurance exchanges are still scheduled to begin open enrollment on October 1, 2013. In order to receive subsidized insurance coverage, those enrolling in the exchanges must be earning 400 percent or less of the poverty line and not be receiving specified levels of coverage through their employer.

The delay will be welcome news for employers that have struggled with the complexities of the ACA's myriad regulations. It will give them an additional year to work with their legal counsel and benefits experts to decide how to address ACA and its potential penalties for the failure to offer coverage, or for offering unaffordable coverage, to full-time employees.

While the reporting requirements do not kick in until 2015, Administration officials said they still strongly encourage employers to voluntarily report this information in 2014, and to maintain or expand access to health care coverage.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Carlton Fields | Attorney Advertising

Written by:

Carlton Fields

Carlton Fields on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.