Transition Relief on Certain Information Reporting and Employer Shared Responsibility Provisions

by McDermott Will & Emery

The Internal Revenue Service has provided transition relief for 2014 from the information reporting requirements under Internal Revenue Code Sections 6055 and 6056, and from the employer pay-or-play penalties under Code Section 4980H.

The Affordable Care Act (ACA) added Sections 6055, 6056 and 4980H to the Internal Revenue Code.  Code Sections 6055 and 6056 require annual information reporting, including information related to health insurance coverage offered by an employer to its employees.  Code Section 4980H requires employers to provide a minimum level of health care coverage to full-time employees or risk a shared responsibility tax penalty (otherwise known as the pay-or-play penalty).  On July 9, 2013, the Internal Revenue Service (IRS) published Notice 2013-45, which provides transition relief for 2014 from the information reporting requirements under Code Sections 6055 and 6056, and from the employer pay-or-play penalties under Code Section 4980H. 

What Employers Need to Know

  • Proposed rules for the information reporting provisions under Code Sections 6055 and 6056 are expected to be published in summer 2013 and will reflect the 2014 transition relief.  Once the proposed regulations have been issued, reporting under Code Sections 6055 and 6056 will be optional for 2014, and no penalties will be applied for failure to comply with the reporting provisions for 2014.
  • No pay-or-play penalties will be assessed for 2014.  This effectively means that employers are not required to provide health care coverage to employees working an average of 30 hours per week until 2015.
  • The transition rules in the proposed pay-or-play regulations have not been extended for 2015.  Therefore, absent subsequent guidance from the IRS, employers should be prepared to comply with the proposed regulations as they apply for 2015.  For example, under the proposed regulations, employers wishing to adopt a 12-month measurement period, generally, were permitted to adopt a shorter measurement period (not less than six months) for 2014 coverage purposes only.  This was an acknowledgment of the difficulties employers may have given the late publication date of the proposed pay-or-play rules.  Employers should ensure that appropriate hours tracking systems are in place in 2013 and 2014 so that employers can identify full-time employees eligible for coverage in 2015.
  • An individual will continue to be eligible to receive a premium tax credit under Code Section 36B if his or her household income is within a specified range and he or she is not eligible for other minimum essential coverage, including an eligible employer-sponsored plan that is affordable and provides minimum value.  The individual must apply for the premium tax credit by completing an application form through the Health Insurance Marketplace.
  • The 2014 transition relief does not affect the effective date or application of other ACA provisions.  For example, in addition to other ACA requirements, employers must still (i) report and pay the Patient-Centered Outcomes Research Institute fee on IRS Form 720 by July 31, 2013; (ii) provide a summary of benefits and coverage as required under applicable guidance; (iii) report annual enrollment counts by November 15, 2013, for purposes of the transitional reinsurance program fee; (iv) report the cost of employer-sponsored health coverage on an employee’s W-2 by January 31, 2014; (v) provide a notice to employees regarding their coverage options under state and federally facilitated health insurance exchanges by October 1, 2013; and (vi) comply with the new cost-sharing requirements and prohibition on waiting periods in excess of 90 days, effective January 1, 2014. 

Next Steps

In the Notice, the IRS emphasizes that voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.  Therefore, employers sponsoring group health plans may consider voluntary compliance with the reporting requirements in 2014, because such compliance may help identify any issues with reporting systems prior to 2015.  Employers should continue to analyze how best to comply with the employer shared responsibility regulations (i.e., whether to “pay or play”) and be prepared to implement any required plan design changes in 2015.  The previously released pay-or-play regulations were issued in proposed form and may change based on this newly issued delay guidance.  Employers that have already made plan design decisions for 2014 should review and amend enrollment materials and plan documents, update summary plan descriptions and revise other employee communications as necessary to reflect any changes.  Employers should also be aware that future guidance may cause additional changes to some of the ACA requirements discussed above and possibly require further review and revision to plan documentation or participant communications.  


Written by:

McDermott Will & Emery

McDermott Will & Emery 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.