The House introduced legislation that aims to make it easier for individuals, employers, states and the federal government to determine who is eligible for premium tax credits under the Affordable Care Act.

The bill, known as the Commonsense Reporting and Verification Act of 2015, would create a front-end voluntary prospective reporting system to improve the accuracy of tax credit eligibility determinations from the exchanges. Under voluntary prospective reporting, data that would have been reported at the end of the year could be reported at the beginning of the eligibility process to help mitigate issues with inaccurate tax credit determinations. The legislation would also protect privacy by not requiring businesses and insurers to collect and report Social Security numbers for spouses and dependents, and authorizes electronic transmission of reporting data.

The legislation was introduced Wednesday by Rep. Diane Black, R-Tenn., and Mike Thompson, D-Calif., both members of the tax-writing House Ways and Means Committee. Companion legislation is expected to soon be introduced in the Senate by Senators Rob Portman, R-Ohio, and Mark Warner, D-Va. The legislation was developed with substantial input from a business group known as the Employers for Flexibility in Health Care (E-FLEX) Coalition, and received support from the Retail Industry Leaders Association, a trade group for large retailers.

“The business owners that I meet with in my district take pride in offering affordable health coverage to their employees but they don’t want to face an onslaught of government reporting requirements in order to do it,” Black said in a statement Wednesday. “As it stands today, the IRS forces employers to compile massive amounts of personally identifiable information every month in order to comply with the ACA’s employer mandate. This takes valuable time and resources away from the daily operations of running a business. That is why my bipartisan bill would allow employers to voluntarily report the type and availability of insurance coverage one time, at the beginning of the year, without including the confidential information of their employees and dependents. I am grateful to Congressman Mike Thompson and the E-FLEX Coalition for joining me in support of this much-needed legislation.”

A report from the Treasury Inspector General for Tax Administration highlighted the difficulties of verifying eligibility of the Premium Tax Credit and the Advance Premium Tax Credit in the Affordable Care Act (see Report Challenges IRS Ability to Verify ACA Tax Credit Qualifications).

“While the health care law isn’t perfect, it was an important first step toward making quality, affordable health care a reality for all Americans. Now it’s time to work across the aisle to make commonsense improvements to the law, and that is exactly what this legislation will do,” said Thompson. “I’ve heard from employers of all sizes, who want to offer health care to their employees, about the challenges they face complying with the ACA’s administrative requirements. This bill would allow employers to maintain employer-sponsored health coverage, while reducing reporting burdens on businesses so they can focus on what they do best – creating jobs and growing our local economies. Our bill would also increase consumer protections by requiring that eligibility for subsidies be based on the most recent tax data.  This will increase accuracy and ensure that individuals and families aren’t hit with a large and unexpected tax bill at the end of the year.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access