Penalty Flag – Excessive Suffocation!

Bob Saelinger

Yesterday the IRS issued well over 100 pages of proposed regulations dealing with the massive new reporting requirements imposed by the Affordable Care Act (ACA) on large employers (more than 50 employees), insurance carriers and self-insured employers. These proposed regulations (issued under IRC sections 6055 and 6056) are at the heart of the IRS’s ability to enforce the ACA’s employer mandate, as well as the individual mandate. Now we understand more clearly why the effective date of the employer mandate was delayed from 2014 to 2015 – compliance with these rules will be suffocating to notice-overloaded benefits/HR/payroll professionals, not to mention the cost to implement them — even though the proposed rules attempt to ease the compliance pain in certain respects. New applicable Forms 1094-B, 1095-B, 1094-C, and  1095-C will need to be filed for the first time in early 2016, as well as the corresponding employee notices relating to these forms. IRS encourages employers to take a trial run at compliance in 2014/15 as stated in the preamble to the proposed regulations: “Real-world testing of reporting systems and plan designs through voluntary compliance in 2014 will contribute to a smoother transition to full implementation for 2015.”  Wonder if any employers will actually take them up on that suggestion.  In the meantime, an imaginative (cynical?) reality TV show producer may want to pick up this topic for a new series.