IRS Asks for Voluntary Compliance with Delayed ACA Provisions

July 11, 2013 ( – The Internal Revenue Service (IRS) issued a formal notice about the delay in implementation of certain employer requirements under the Affordable Care Act (ACA).

By Rebecca Moore | July 11, 2013
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A July 2 Treasury Department blog posting by Mark J. Mazur, the assistant secretary for Tax Policy at the U.S. Department of the Treasury, announced the delay for one year of the deadline for employer reporting and shared responsibility payments under the ACA (see "Regulators Delay ACA Employer Reporting, Payment Deadlines"). The IRS then issued Notice 2013-45, which provides transition relief for 2014 from: (1) the information reporting requirements applicable to insurers, self-insuring employers, and certain other providers of minimum essential coverage under § 6055 of the Internal Revenue Code (Code) (§ 6055 Information Reporting); (2) the information reporting requirements applicable to applicable large employers under § 6056 (§ 6056 Information Reporting); and (3) the employer shared responsibility provisions under § 4980H (Employer Shared Responsibility Provisions).

However, in preparation for the application of the Employer Shared Responsibility Provisions beginning in 2015, the agency is encouraging employers and other affected entities to voluntarily comply for 2014 with the information reporting provisions (once the information reporting rules have been issued) and to maintain or expand health coverage in 2014. "Real-world testing of reporting systems and plan designs through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015," the agency said in the Notice. It expects to issue proposed information reporting rules this summer.

The IRS explained that § 6056 Information Reporting is integral to the administration of the Employer Shared Responsibility Provisions. In particular, because an employer typically will not know whether a full-time employee received a premium tax credit, the employer will not have all of the information needed to determine whether it owes a payment under § 4980H. Accordingly, the employer is not required to calculate a payment with respect to § 4980H or file returns submitting such a payment.

Instead, after receiving the information returns filed by applicable large employers under § 6056 and the information about employees claiming the premium tax credit for any given calendar year, the Internal Revenue Service (IRS) will determine whether any of the employer's full-time employees received the premium tax credit and, if so, whether an assessable payment under § 4980H may be due. If the IRS concludes that an employer may owe such an assessable payment, it will contact the employer, and the employer will have an opportunity to respond to the information the IRS provides before a payment is assessed.