Last summer, the Obama administration delayed implementing the employer mandate in the Affordable Care Act because, it said, it needed time to figure out how it might simplify the law's complicated reporting requirements for businesses with 50 or more employees. "We don't necessarily need to load up the vast majority of companies that are already doing the right thing with a bunch of additional paperwork," President Obama told The Times in an interview in July, asking, "Are there simpler ways for us to allow them to certify that they're providing health insurance?"
But the final regulations were released last week, and business groups are complaining that the only streamlining the Internal Revenue Service appears to have achieved is for itself.
"A lot of the provisions here for precertification and managing reporting requirements, particularly for very large employers, are really not very helpful," said Neil Trautwein, employee benefits policy counsel at the National Retail Federation. "And I think it's really cast more to meet the needs of the cash-strapped I.R.S. and their clunky computer systems."
The regulations at issue implement two new sections of the tax code created by the Affordable Care Act. Section 6056 helps the I.R.S. enforce the mandate on so-called "applicable large employers" — those with 50 or more employees — to provide full-time workers with health insurance that meets the law's standards for quality and affordability. It will also help the agency determine whether employees who use tax credits to buy their own insurance on the new state exchanges are entitled to a subsidy. A company pays a penalty when a full-time employee buys individual insurance with a subsidy.
Another new section of the code, Section 6055, is meant to help the I.R.S. make sure that individuals comply with their new obligation to have insurance. Under Section 6055, insurance providers are required to share the names of individuals enrolled in health plans throughout the year with the I.R.S. and also provide the same information to each household. Companies that self-fund their insurance plans also bear this burden of notification.
Some business groups said that collecting the Social Security numbers of an employee's dependents, as the rules require, raised privacy concerns. "We have never collected dependent Social Security numbers, and we think there are other ways they could do it," said Michelle Neblett, director for labor and work-force policy at the National Restaurant Association. "But because of the way the I.R.S. system is set up, they say they need tax ID numbers."
The bulk of employer reservations involve Section 6056. For each full-time employee, the law specifies that a company subject to the mandate must report, among many other details, whether the employee was offered insurance for each month of the year, the cost to the employee of the least expensive insurance option in each month, and the months in which the employee was covered by insurance. The law requires monthly reporting because the company must offer insurance in each month of the year in order to avoid the penalty and because the tax credits are available to individuals on a month-by-month basis.
In its final rule, the I.R.S. created an exception to the reporting requirements for companies that offer compliant insurance policies that are so inexpensive that no employee could find them unaffordable under the law. The Affordable Care Act deems health insurance unaffordable when the worker's share of the premium cost exceeds 9.5 percent of his or her household income. The reporting regulations set the ceiling for the employee's cost of a universally affordable health plan at 9.5 percent of the federal poverty level.