It is hard to believe that the ACA has existed for only six years. During this time it has continued to change and evolve and that is still the case as the possibility of another new rule comes into existence.
This new rule has been devised to enhance the transparency around the cost of health insurance.
What Is The Rule?
This rule basically states that issuers of health insurance in both the individual and group plan market must make their cost-sharing information readily available to the IRS.
This sounds like a reasonable requirement to put into effect, however, there are a few reasons that this is actually a complicated request. There is currently no system for insurance providers to transmit this data. Therefore they will have to create a digital infrastructure that will be able to access this data efficiently and provide it to employers.
Employers who are self-insured will also be responsible for creating a method for providing this data.
What Problems Will It Solve?
This new rule would add another layer of reinforcement to proving that employers are providing affordable health insurance to their employees. Some of the information that the IRS would be expecting include out-of pocket maximums, the rates that the insurance provider is administering to the employer, and the cost-sharing liability.
Essentially, this rule will make ACA reporting more difficult for insurance providers and self-insured employers in the short term. Although, in the long run the health insurance rates will be better monitored. The outcome would hopefully be another way to ensure that all eligible employees are being offered affordable health insurance.
When Would This Take Effect?
There is no need to worry yet, this rule, if passed, will not take effect until the tax year 2021. So at this stage of the game the best thing to do is to be aware of the possibility and keep an eye out for more information in the new year.
Does My Organization Have A Say?
If you have strong feelings about this rule and want to make them known, you can! By following this link, you are able to submit a comment on this new rule at regulations.gov. This is a platform for individuals to voice their opinions on proposed rules such as this one.
The tax year 2021 may seem pretty far off in the distance. How is your ACA reporting for the tax year 2019 going? If you are feeling overwhelmed by the volume of work that goes into this process then it may be time to consider bringing in an expert! ACAwise is a full-service reporting solution. Our team of experts will guide you through the process. You send us your employee data and we generate your forms for you! We know the codes so that you don’t have to! Learn more today!