A coalition of employers and trade associations from a variety of different industries are asking Congress to clarify the rules for determining eligibility for tax credits for health insurance.
The letter, sent Wednesday, comes from a coalition of 178 employers and trade associations, who have endorsed legislation aimed at providing employees and employers with a more effective means for determining eligibility for tax credits under the Affordable Care Act for insurance purchase through health insurance exchanges. The letter was sent to Rep. Diane Black, R-Tenn., and Mike Thompson, D-Calif., the co-sponsors of H.R. 2712, the Commonsense Reporting and Verification Act of 2015.
“On behalf of the undersigned businesses, national, state and local trade associations, and organizations representing millions of American workers and their families, and hundreds of thousands of job creators, we write in support of H.R. 2712, the Commonsense Reporting and Verification Act of 2015,” said the business groups. “We appreciate your leadership in introducing H.R. 2712 to help reduce confusion surrounding the Affordable Care Act’s (ACA) Exchange tax credit eligibility, and provide businesses and insurance carriers with regulatory relief under the law’s reporting requirements.”
The letter was circulated by the E-Flex Coalition, which is led by the Retail Industry Leaders Association, the American Staffing Association, the Food Marketing Institute and Aetna. Other companies and groups signing the letter included Best Buy, 7-Eleven, Walmart, American Eagle Outfitters, Gap Inc., Albertsons Companies Whole Foods, the American Hotel and Lodging Association, the American Rental Association, Associated Builders and Contractors, AutoZone, Lowe’s Companies, PepBoys and many others.
Under the ACA, employers and insurance carriers are required to gather numerous pieces of data on a monthly basis and report them annually to the Internal Revenue Service and individuals. The information reported is intended to verify compliance with the individual and employer mandates, and administer advanced premium tax credits and cost sharing subsidies under the state and federal-facilitated insurance Exchanges.
The Commonsense Reporting and Verification Act of 2015 creates a front-end voluntary prospective reporting system to improve the accuracy of Exchange tax credit eligibility determinations. Under voluntary prospective reporting, data that would have been reported at the end of the year could now be reported at the beginning of the eligibility process, and 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.
“H.R. 2712 is a first step in providing individuals, employers, insurers, states, and the federal government with more clarity about who may be eligible for premium tax credits, and potentially minimizing the prospects of individuals being subjected by the IRS to repayment of advanced premium tax credits or cost sharing subsidies in cases in which Exchanges made an incorrect eligibility determination,” added the signers of the letter.
The E-FLEX Coalition first raised the concept of voluntary prospective reporting to the Administration four years ago, and has been working since then to incorporate the system into the regulatory structure of these ACA requirements.
The Senate Finance Committee held a hearing Thursday on problems found by the Government Accountability Office with awarding tax credits for health insurance (see Fake Applicants Received Tax Credits for Health Insurance). The GAO found that 11 fictitious applicants were able to receive about $30,000 in Advance Premium Tax Credits for purchasing health insurance through the exchanges.
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