Reduce Administrative Burden for Employers Who Provide Health Insurance

By Andrew F. Biernat, Vice President/Strategic Business Advisor, Gilroy Kernan & Gilroy

While rising healthcare costs pose challenges for many employers across the nation, another onerous problem exists that gets very little attention – government regulation and compliance costs – which keep climbing.

Employers who provide health insurance have to file a number of reports with the IRS each year — many of which have different deadlines. For instance, all employers with more than 50 workers — and even some with fewer — must report the value of health insurance coverage provided to each employee.

Firms with more than 50 employees must also certify that they offered a minimum level of coverage to each full-timer. And they have to provide detailed information on the share of the cost of coverage that each employee was responsible for. They must also collect the Social Security numbers of workers’ dependents.

If these reports are submitted incorrectly or at the wrong time, employers face steep fines or penalties. For example, businesses with gross receipts of less than $5 million who fail to file correctly must pay penalties of between $50 and $260 per employee return. Total fines can reach hundreds of thousands of dollars.

The cost of filing extra paperwork may not be a problem for large companies, which have entire human resources departments dedicated to handling tasks like these. But medium-sized businesses lack the same resources. Two-thirds of all employers rely on outside organizations to help with reporting requirements. Many have to seek out training to help their employees deal with their reporting obligations.

Hiring outside firms to help with administrative tasks is costly and time-consuming. It also takes away valuable time that staff members could dedicate to other tasks, such as training new employees or making additional sales.

Fortunately, Congress is poised to offer relief. Lawmakers have introduced new bipartisan bills designed to simplify some of the reporting requirements for employers who offer health insurance.

Senators Mark Warner (D-VA) and Rob Portman (R-OH) introduced S. 3673. This bipartisan bill will provide much-needed relief for employers seeking to comply with the reporting requirements under Section 6055 and 6056 for enforcement of the ACA’s individual and employer mandates.

  • S. 3673. would move employers to a voluntary reporting system and decrease the amount of information requested by the IRS and other agencies Establish a new voluntary prospective reporting system for employers to report to the IRS information about their health plans. Exchanges will use the federal data hub to access this data for individual verification for tax credits.
  • Require that employers report to the IRS only those employees (and/or their dependents) who are not receiving healthcare from their employer, greatly simplifying the requirement that all employees be reported.
  • Specify that information that would be reported would include name and employer identification, who has been extended an offer of minimum essential coverage, whether coverage meets minimum value and the affordability safe harbor, and months that coverage is available without waiting periods. Among other provisions.

These changes would save businesses time and money — thereby enabling them to continue offering benefits or resume offering insurance if they had ceased to do so. That’d be great news for employees.

The bill would also help medium-sized firms compete with their larger rivals for talent. Workers want their employers to provide health benefits. One Harvard Business Review study found that 88 percent of workers would give a lower-paying job “heavy” or “some consideration” if it offered better health benefits than a higher-paying job.

Medium-sized businesses are the lifeblood of the American economy. Nearly half of all workers draw their paychecks from firms with fewer than 250 employees.

This reform wouldn’t merely help businesses – it would directly improve workers’ lives too. Right now, if workers have access to health benefits at work but instead sign up for an exchange plan and receive tax credits, there’s a chance the IRS could force them to pay back those subsidies. A voluntary reporting system could help avert this scenario by warning exchange shoppers that their employer offers health insurance.

The federal government can lend businesses — and workers — a helping hand by streamlining burdensome reporting requirements.   You can take action by clicking here to help:

  • Andrew Biernat is Vice President/Strategic Business Advisor for Gilroy Kernan & Gilroy
  • Chairman of the Employer Working Group Council for the National Association of Health Underwriters in Washington, D.C.
  • Board Member, Membership and Media Chairman & Past President of the New York State Association of Health Underwriters, Albany, New York


If you have any questions, please contact Andrew Biernat at



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