IRS issues rules for employer mandate under ObamaCare

The Internal Revenue Service (IRS) on Thursday issued instructions for complying with ObamaCare's employer mandate.

The mandate, which requires businesses with more than 50 workers to offer insurance or face penalties, was initially slated to take effect in January. But the Obama administration announced in July that it would delay enactment of the contentious rule for a year, in part because of confusion over the reporting requirements. 

Still, the IRS is urging insurers and applicable employers to begin following the draft rules next year on a voluntary basis.


“Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015,” according to a news release issued by the Treasury Department, where the IRS is housed.

The guidance from the IRS is a product of ongoing talks with employers, insurers and taxpayer groups, according to Treasury.

“Today’s proposed rules enable us to continue engaging on how best to implement the [healthcare law's] reporting requirements in a more streamlined and focused manner,” said Assistant Secretary for Tax Policy Mark J. Mazur. “We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring about a smooth implementation of those new rules.”

The agency noted that the vast majority of companies with 50 or more workers — roughly 95 percent — already offer healthcare coverage.

The proposed regulations are meant to streamline and simplify reporting requirements. If enacted as drafted, they would replace mandated employee statements about coverage offers from employers with a W-2-based system for reporting the company-sponsored healthcare offers to workers and their families. 

The regulations would also ease several other reporting requirements, and would limit reporting for self-insured employers that offer no-cost coverage. 

Interested parties and members of the public will have 90 days to weigh in on the rule, and the comments would be considered before final regulations are issued. 

Neil Trautwein, vice president of the National Retail Federation, called the proposal a positive step toward needed accommodations for the group’s members. 

“Retailers are not interested in being overly burdened by bureaucratic red tape or time-wasting, duplicative reporting requirements," Trautwein said.