IRS Issues Transition Relief for Information Reporting and Employer Mandate Requirements Under the Affordable Care Act

Author: Tracy Morley, XpertHR Legal Editor

July 12, 2013

The Internal Revenue Service (IRS) issued Notice 2013-45, providing transition relief from the information reporting requirements under the Internal Revenue Code applicable to:

  1. Insurers, self-insuring employers, and certain other providers of minimum essential coverage under § 6055 of the Code; and
  2. Applicable large employers under § 6056 of the Code.

The Notice also provides transition relief for the employer shared responsibility requirements under § 4980H of the Code. Section 4980H of the Code imposes penalties on employers that either do not offer coverage, or offer coverage that is not affordable or does not provide minimum value.

The notice is in Q&A format and answers the following questions:

  • When will the rules be published and how will the provisions apply for 2014?
  • How does the 2014 transition relief affect the employer shared responsibility provisions for 2014?
  • Does this affect employees' access to the premium tax credit?
  • What does the postponement mean for other provisions in the Affordable Care Act?

As part of the transition relief, the IRS announced that no employer shared responsibility payments will be assessed for 2014.

This transition relief follows the announcement delaying the employer mandate and associated insurer reporting requirements from January 1, 2014 to January 1, 2015. In its notice, the IRS states that the transition relief is intended to "provide additional time for input from employers and other reporting entities in an effort to simplify information reporting consistent with effective implementation of the law" and "to provide employers, insurers and other providers of minimum essential coverage time to adapt their health coverage and reporting systems."

The employer shared responsibility provisions and associated reporting requirements will be fully effective for 2015. In preparation for that, employers are encouraged to voluntarily comply with the information reporting provisions for 2014 once these rules are issued.