The Obamacare Report (#11)/New reporting requirements for large employers will require more networking
September 17, 2013
This is #11 in a series of Obamacare Reports. (See also postings by Mitchell Law Office)
On September 5, 2013, proposed regulations were released by the Department of Treasury/IRS for the information reporting requirements to be placed on large employers under the Affordable Care Act (ACA).
These regulations require new types of information to be collected and reports to be filed with federal agencies. These reports are required so that the Internal Revenue Service (IRS) can calculate subsidies and determine any individual penalties.
The reporting requirements will increase the information flow among health care organizations. Coverage, service, and payment issues will all lead to more networking.
For example, providers will require more information to understand when and why patients are eligible or not eligible for employer insurance (in a given month). Similarly, insurance companies will need more information to understand when and why employees enrolled in large-employer group plans are eligible or not eligible under the group policies that have been sold. And more monthly information from federal agencies will be needed by both providers and insurance companies in order to correctly handle payment issues.
The complexity of these rules is a major reason why implementation of the large-employer mandate has been postponed until 2015.
The new regulations specify that every large employer is to file reports regarding month-by-month coverage for every employee. These reports are to include the minimum essential health insurance coverage offered to employees, spouses and dependents; whether employees are full time or part time; whether employees are in a waiting period or not employed during a given month; whether coverage was offered to an employee even if not counted as full-time; whether the “safe harbor” provisions of the ACA have been met; and what share of the premium costs have been allocated to the employee for the lowest-cost insurance option for self-coverage.
This list is only partial. The complexity of the regulations indicates why the large-employer mandate was postponed for a year.
Relationships among federal agencies, employers, providers and insurance companies are becoming more networked in fundamental ways. This networking will involve increased information sharing, new types of service authorization and reporting, and expanded payment information.
Attorney practices will also be impacted by these reporting requirements.
Individuals will often be confused by the new reports that they receive from employers. Trying to decide whether or not these reports are correct will be a formidable task, as will be correcting any errors. And the impact on individuals can be substantial, since they may incur income tax liability from any errors.
Large employers will often need attorney help to change their internal activities to reflect both reporting requirements and new relationships.
And providers and insurance companies will be affected by the ways in which the new employer reporting affects customers and patients and relationships among organizations.
Attorneys will inevitably be impacted by the expanded reporting and communications, as they attempt to best represent client interests.
More on these and related topics may be found in a recent book by the authors that describes implementation of the ACA and its impact on legal practices.
Previous installments of “Obamacare Reports” address the various ways in which implementation of the ACA is affecting legal practices: