Week two of enrollment in the health insurance marketplace continues with more reports of glitches in the systems causing delays in both federally-facilitated marketplaces and state marketplace. The troubles encountered with marketplace enrollment should serve as a warning for employers that will be facing federal reporting requirements in 2015. Although the employer mandate under the Affordable Care Act (requiring all large employers to offer affordable health insurance of minimum value to full-time employees or pay excise tax penalties) has been delayed until 2015, employers should not be lulled into complacency for 2014. Employers should be tracking employee hours in 2014 to ensure that when 2015 rolls around, the employer is poised to offer insurance to all employees required by the law.
In addition, 2015 will bring new reporting requirements to employers that will require them to harness an unprecedented amount of data on the health care benefits offered to their employees. Specifically, Section 6056 of the ACA requires employers to report to both the IRS and employees, details on who received an offer of health insurance coverage, who enrolled in the coverage, what the coverage included, and the value of the coverage. Although this minimum essential coverage reporting will not be carried out until January 2016, the information to be reported will be from the 2015 calendar year. Employers should use 2014 to ensure their human resource, payroll, accounting and benefits data systems are collecting the necessary information for the employer to satisfy its reporting obligations. The accuracy of the information gathered and reported in 2016 will impact the penalties the IRS will look to impose on an employer under the employer mandate.
If an employer uses more than one payroll system or more than one benefit provider, they will have to work to consolidate the reporting from each system to satisfy the Section 6056 reporting to the IRS and employees. Similarly, employers with separate systems for human resources, payroll and benefits data should expect fulfilling the reporting requirements to be much more complex than if all the information necessary was gathered in one system. Employers should consider building a data warehouse or hiring a third-party service provider to ensure the data is accurate, consistent and in a format compatible with the reporting requirements. The final rules for the reporting requirements have not yet been released, but in the meantime, employers can begin to assess their obligations with a quick review of the proposed rules, found here.
