Restaurant Owners Need Flexibility in Health Care Law Reporting Requirements

(November 7, 2013) The National Restaurant Association today reiterated its support of a streamlined reporting process for employer-sponsored health plans, noting that a simplified structure would minimize the chances of employees being forced to repay tax credits for which eligibility was inaccurately determined, as well as reduce unnecessary administrative burdens on employers.

The NRA is a leader of the Employers for Flexibility in Health Care Coalition (E-FLEX), a coalition of trade associations and businesses in the restaurant, retail, hospitality, supermarket, construction, temporary staffing and other service-related industries working together for more flexibility for employers as the health care law is implemented. The coalition filed comments with the Internal Revenue Service about the agency’s recent proposed regulation on reporting requirements for employers offering health plans.

As the Administration finalizes those regulations, the E-FLEX Coalition urged the Administration “to offer options for streamlined reporting processes that are viable for employers with differing workforces.”

“The E-Flex Coalition believes a less expansive approach to information reporting can achieve the same ends with fewer burdens to the IRS and employers who voluntarily provide health coverage without giving rise to any adverse effects for individuals,” E-FLEX members wrote in their official comments. “Utilizing a certification method is a reasonable approach that could be used as the basis for a simplified reporting process that could benefit employers of all sizes and structures.”

The Coalition noted that a certification method could help “minimize the number of employees subjected to repayment of advanced premium assistance tax credits for which eligibility was inaccurately determined, as well as reduce unnecessary administration burden while facilitating the simplified administration of the employer responsibility provisions.”

“The E-Flex Coalition does not see the collection on data on every employee and their dependents covered in an employer-sponsored plan as intrinsically improving the administration of the ACA’s premium tax credits and employer tax penalties,” the Coalition added.

The proposed regulations detail what information large employers will be required to file starting in 2016 with both the IRS and full-time employees about health care coverage the employer offered in 2015. Among other information, a new Section 6056 of the Internal Revenue Code requires large employers to provide a list of full-time employees, the coverage offered to each, by month, and the cost of self-only coverage. A separate Section 6055 will require insurers, self-insuring employers and other parties that provide coverage to detail the months individuals were covered by health plans, among other data. The IRS will use the data to verify compliance with the health care law’s individual and employer mandates.

Since 2011, the NRA and E-Flex Coalition partners have encouraged the Treasury Department and IRS to adopt employer reporting rules that minimize the prospects of employees being subject to repayment of advanced premium tax credits and to mitigate the recordkeeping and reporting burdens on employers.

The NRA continues to educate restaurant employers of their requirements under the law and that they will need systems in place next year to determine employees’ hours of service in 2014, so they know whether the business will be covered by the employer mandate in 2015, and then based on these proposed rules, be able to track eligible employee and dependent data, tabulated by calendar month, for coverage offers in 2015. Large employers will be required to file the first information reports about 2015 coverage in January 2016.