1. Short title
This Act may be cited as the “Commonsense Reporting Act of 2022”.
Commonsense Reporting Act of 2022
A BILL
To streamline the employer reporting process and strengthen the eligibility verification process for the premium assistance tax credit and cost-sharing subsidy.
2. Findings
Congress finds the following:
The Department of the Treasury and the Internal Revenue Service should work together with other relevant departments and agencies to identify and implement methods to minimize compliance burdens on businesses, insurance carriers, and individuals.
Such collaboration should strike an appropriate balance between sufficient reporting to enforce the law and protecting the privacy of individuals.
3. Voluntary prospective reporting system
In general— Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Health and Human Services, the Secretary of Labor, and the Administrator of the Small Business Administration, shall develop and implement guidance providing for a prospective reporting system meeting the requirements of subsection (b). Such system shall be available for use by employers on a voluntary basis beginning not later than January 1, 2023.
Requirements— The system created under subsection (a) shall include—
voluntary reporting by each participating employer that offers minimum essential coverage to its full-time employees and their dependents under an eligible employer-sponsored plan, not later than 45 days before the first day of the annual open enrollment period under section 1311(c)(6)(B) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)(6)(B)) for each calendar year, of—
the name and employer identification number for purposes of section 6056 of the Internal Revenue Code of 1986 of the employer;
a certification of—
whether coverage meeting the definition of minimum essential coverage in section 5000A(f) of the Internal Revenue Code of 1986 is offered to the full-time employees (within the meaning of section 4980H of such Code) of the employer;
whether such coverage is offered to part-time employees of the employer;
whether such coverage is offered to dependents of employees;
whether such coverage is offered to spouses of employees;
whether such coverage meets the minimum value requirement of section 36B(c)(2)(C)(ii) of such Code;
whether such coverage satisfies the requirements to qualify for one of the affordability safe harbors promulgated by the Secretary of the Treasury for purposes of section 4980H of such Code; and
whether the employer reasonably expects to be liable for any shared responsibility payment under section 4980H of such Code for such year;
the months during the prospective reporting period that such coverage is available to individuals described in clauses (i) through (iv) of subparagraph (B);
what waiting periods, if any, apply with respect to such coverage; and
a list of all employer identification numbers of the employer for entities that employ employees within the employers control group under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code for 1986;
processes necessary to ensure that Exchanges, the Federal Marketplace Data Services Hub, and the Internal Revenue Service can securely and confidentially access the information described in paragraph (1) as necessary to carry out their respective missions, and to provide to the Secretary of Health and Human Services additional information relating to eligibility determinations for advance payment of the premium tax credits under section 36B of such Code and the cost-sharing subsidies under section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071);
a process to allow Exchanges to follow up with employers in order to obtain additional reasonably necessary information relating to an employee’s eligibility for such advance payment or such cost-sharing subsidies, and to allow an employee to receive notification of any problem in verifying such eligibility; and
a process to allow employers using the system to provide timely updates to the Federal Marketplace Data Services Hub regarding any cancellation of coverage or significant change in coverage for participating employees that would change the information reported under paragraph (1).
Employer notification of employee enrollment in exchange plans— Subparagraph (J) of section 1311(d)(4) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(d)(4)(J)) is amended by striking “to each employer” and all that follows through “(and the effective date of such cessation); and” and inserting
“(i) the name of each employee of the employer who enrolls in a qualified health plan for a plan year, or whose dependents enroll in such a plan, at the time of such enrollment; or
“(ii) the name of each employee of the employer described in subparagraph (I)(ii) who ceases coverage under a qualified health plan during a plan year (and the effective date of such cessation); and”
Exemption from reporting requirement under internal revenue code of 1986— Section 6056 of the Internal Revenue Code of 1986 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:
“(f) Exemption—If, through the system created pursuant to section 3(a) of the Commonsense Reporting Act of 2021, an employer provides prospective reporting for any calendar year that meets the requirements of section 3(b)(1) of such Act, such employer shall be treated as satisfying the return requirements of subsections (a), (b), and (c) for such year.”
Third-Party filing— An employer may contract with a third party to make the report under subsection (b)(1) without affecting the employer’s treatment as having satisfied the return requirements of subsections (a) and (b) of section 6056 of the Internal Revenue Code of 1986.
Access to the national directory of new hires— Subsection (i)(3) of section 453 of the Social Security Act (42 U.S.C. 653) is amended by adding at the end the following new sentence: “The Secretary of the Treasury and the Secretary of Health and Human Services shall have access to the information in the National Directory of New Hires for purposes of administering section 36B and 4980H of the Internal Revenue Code of 1986 and section 1402 of the Patient Protection and Affordable Care Act (42 U.S.C. 18071). Subsection (k)(3) shall not apply to information received for purposes of the administration of such sections 36B and 4980H of such Code and section 1402 of such Act.”.
Improving employee access to accurate EINS— Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall develop and implement guidance for allowing any employee of an employer to receive, on request, the employer’s employer identification number for purposes of section 6056 of the Internal Revenue Code of 1986. Employers shall provide the employer’s employer identification number for purposes of section 6056 of the Internal Revenue Code of 1986 on employee pay statements.
Funding for voluntary prospective reporting system— There is authorized to be appropriated to the Secretary of the Treasury, the Secretary of Health and Human Services, the Secretary of Labor, and the Administrator of the Small Business Administration such sums as are necessary to carry out this section.
4. Protection of dependent privacy
In general— Paragraph (1) of section 6055(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following flush sentence:
Effective date— The amendment made by this section shall apply to returns the due date for which is after the date that is 60 days after the date of the enactment of this Act.
5. Electronic statements
In general— Subsection (c) of section 6056 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(3) Electronic delivery—An individual shall be deemed to have consented to receive the statement under this subsection in electronic form if such individual has affirmatively consented at any prior time, to the person who is the employer of the individual during the calendar year to which the statement relates, to receive such statement in electronic form. The preceding sentence shall not apply if the individual revokes consent in writing with respect to the statement under this subsection.”
Statements relating to health insurance coverage— Subsection (c) of section 6055 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(3) Electronic delivery—An individual shall be deemed to have consented to receive the statement under this subsection in electronic form if such individual has affirmatively consented at any prior time, to the person required to make such statement (such as the provider of the individual’s health coverage), to receive in electronic form any private health information (such as electronic health records), unless the individual revokes such consent in writing.”
Effective date— The amendments made by this section shall apply to statements the due date for which is after December 31, 2021.
6. Time for appeal
In general— Section 4980H(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(4) Time for appeal—The Secretary shall allow an applicable large employer 90 days from the date of the first letter which allows the employer an opportunity for administrative review of a proposed employer shared responsibility payment under this section by the Internal Revenue Service Independent Office of Appeals to appeal the proposed assessment of such payment before issuing the notice and demand for payment under paragraph (1).”
Effective date— The amendment made by this section shall apply to assessments in taxable years beginning after the date of the enactment of this Act.
7. Statute of limitations on penalty assessment
In general— Section 4980H(d) of the Internal Revenue Code of 1986, as amended by section 6, is amended by adding at the end the following new paragraph:
“(5) Statute of limitations on penalty assessment—With respect to an assessment of an assessable payment under paragraph (1), the statutory period for such assessment shall expire at the end of the 3-year period beginning on the date the employer files the return under section 6056 for the calendar year with respect to which such payment is determined.”
Effective date— The amendment made by this section shall apply to proposed assessments with respect to which a letter described in section 4980H(d)(4) of the Internal Revenue Code of 1986 (as added by this section) is issued in taxable years beginning after the date which is 1 year after the date of the enactment of this Act.
8. GAO studies
Study of first years of employer reporting—
In general— The Comptroller General of the United States shall conduct a study that evaluates, with respect to the period beginning on January 1, 2015, and ending on December 31, 2020—
the notification of employers by Exchanges established under title I of the Patient Protection and Affordable Care Act (Public Law 111–148) that a full-time employee of the employer has been determined eligible for advance payment of premium tax credits under section 36B of the Internal Revenue Code of 1986 or cost-sharing subsidies under section 1402 of such Act (42 U.S.C. 18071), including information regarding—
the data elements included in the employer notification;
the process by which the notification forms were developed and sent to employers, including whether the process provided for a formal notice and comment period;
whether employers report that such notifications provided sufficient and relevant information for them to make appropriate decisions about whether to utilize the appeals process;
the total number of notifications sent to employers and the timeline of when such notifications were sent;
differences in the notification process between the marketplace facilitated by the Federal Government and the State-Based Marketplaces; and
challenges that have arisen in the notification process, and recommendations to address these challenges; and
the extent to which the Secretary of Health and Human Services has established a separate appeals process for employers who received such a notification to challenge the eligibility determination, as required by section 1411(f)(2) of the Patient Protection and Affordable Care Act (42 U.S.C. 18081(f)(2)).
Report— Not later than 1 year after the date of the enactment of this Act, the Comptroller General shall submit to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means, Energy and Commerce, and Education and Labor of the House of Representatives a report on the results of the study conducted under paragraph (1).
Study of prospective reporting system—
In general— The Comptroller General of the United States shall conduct a study that evaluates, with respect to the period beginning on January 1, 2023, and ending on December 31, 2023, the functionality of the prospective reporting system established pursuant to section 3, including the accuracy of information collected, the number of employers electing to report under such system, and any challenges that have arisen in implementing such system.
Report— Not later than July 1, 2024, the Comptroller General shall submit to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means, Energy and Commerce, and Education and Labor of the House of Representatives a report on the results of the study conducted under paragraph (1).
9. Tax Compliance
In general— Section 6724(d)(1)(B)(xxv) of the Internal Revenue Code of 1986 is amended by inserting “or, in the case of an employer to which section 6056(f) applies, section 3(b)(1) of the Commonsense Reporting Act of 2022” before “, or”.
Effective date— The amendment made by this section shall apply to returns required to be filed after the date of the enactment of this Act.