What This Bill Does
This bill creates a voluntary system for employers to report health insurance information ahead of time instead of after the fact. It aims to make it easier for employers to report and help the government check whether people qualify for health insurance tax credits (financial help paying for health insurance) and cost-sharing subsidies (financial help paying out-of-pocket costs).
Who It Affects
Employers who offer health insurance to workers, employees and their dependents, health insurance exchanges (marketplaces where people buy health insurance), the Internal Revenue Service, the Department of the Treasury, the Department of Health and Human Services, the Department of Labor, the Small Business Administration, and the Social Security Administration.
Key Provisions
• Employers can voluntarily report health insurance coverage information at least 45 days before the yearly open enrollment period starts instead of waiting until after the year ends (Sec. 3(b)(1)).
• The Treasury Secretary, working with other agencies, must create guidance for this voluntary reporting system by 1 year after the bill becomes law, with the system available for use by employers starting no later than January 1, 2024 (Sec. 3(a)).
• Employers using the new voluntary system do not have to file certain other required health insurance reports with the IRS for that year (Sec. 3(d)).
• Employers must provide their employer identification number on employee pay statements (Sec. 3(g)).
• The government can access information from the National Directory of New Hires to administer the health insurance tax credit and employer penalty sections (Sec. 3(f)).
What Changes
If this bill becomes law, employers will have the option to report health insurance information to the government ahead of time using a new system instead of submitting reports after the year ends. Employers choosing this voluntary system will not have to file certain other employer health insurance reports. The government will be able to access new hire information to verify whether workers qualify for health insurance help. Employers will have 90 days to appeal proposed employer shared responsibility payments (penalties) instead of an unspecified timeframe. The time period for the government to assess employer penalties will be limited to 3 years from when the employer files their report.
Important Definitions
• Minimum essential coverage: health insurance that meets the federal definition found in the tax code (Sec. 3(b)(1)).
• Minimum value: health insurance that pays at least a certain percentage of covered benefits as required by tax law (Sec. 3(b)(1)).
• Full-time employees: workers as defined in the employer penalty section of the tax code (Sec. 3(b)(1)).
• Affordability safe harbors: specific ways employers can show their health insurance is affordable under tax code rules (Sec. 3(b)(1)).
Effective Date
The voluntary prospective reporting system must be available for use no later than January 1, 2024 (Sec. 3(a)). Different sections have different effective dates ranging from 60 days after the bill becomes law to 1 year after enactment.
I
118TH CONGRESS
1ST SESSION H. R. 1264
To streamline the employer reporting process and strengthen the eligibility
verification process for the premium assistance tax credit and cost-
sharing subsidy.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 28, 2023
Mr. SMITH of Nebraska (for himself and Mr. THOMPSON of California) intro-
duced the following bill; which was referred to the Committee on Ways
and Means, and in addition to the Committee on Energy and Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To streamline the employer reporting process and strengthen
the eligibility verification process for the premium assist-
ance tax credit and cost-sharing subsidy.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Commonsense Report-
4
ing Act of 2023’’.
5
SEC. 2. FINDINGS.
6
Congress finds the following:
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•HR 1264 IH
(1) The Department of the Treasury and the
1
Internal Revenue Service should work together with
2
other relevant departments and agencies to identify
3
and implement methods to minimize compliance bur-
4
dens on businesses, insurance carriers, and individ-
5
uals.
6
(2) Such collaboration should strike an appro-
7
priate balance between sufficient reporting to en-
8
force the law and protecting the privacy of individ-
9
uals.
10
SEC. 3. VOLUNTARY PROSPECTIVE REPORTING SYSTEM.
11
(a) IN GENERAL.—Not later than 1 year after the
12
date of the enactment of this Act, the Secretary of the
13
Treasury, in consultation with the Secretary of Health and
14
Human Services, the Secretary of Labor, and the Admin-
15
istrator of the Small Business Administration, shall de-
16
velop and implement guidance providing for a prospective
17
reporting system meeting the requirements of subsection
18
(b). Such system shall be available for use by employers
19
on a voluntary basis beginning not later than January 1,
20
2024.
21
(b) REQUIREMENTS.—The system created under sub-
22
section (a) shall include—
23
(1) voluntary reporting by each participating
24
employer that offers minimum essential coverage to
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•HR 1264 IH
its full-time employees and their dependents under
1
an eligible employer-sponsored plan, not later than
2
45 days before the first day of the annual open en-
3
rollment period under section 1311(c)(6)(B) of the
4
Patient Protection and Affordable Care Act (42
5
U.S.C. 18031(c)(6)(B)) for each calendar year, of—
6
(A) the name and employer identification
7
number for purposes of section 6056 of the In-
8
ternal Revenue Code of 1986 of the employer;
9
(B) a certification of—
10
(i) whether coverage meeting the defi-
11
nition of minimum essential coverage in
12
section 5000A(f) of the Internal Revenue
13
Code of 1986 is offered to the full-time
14
employees (within the meaning of section
15
4980H of such Code) of the employer;
16
(ii) whether such coverage is offered
17
to part-time employees of the employer;
18
(iii) whether such coverage is offered
19
to dependents of employees;
20
(iv) whether such coverage is offered
21
to spouses of employees;
22
(v) whether such coverage meets the
23
minimum value requirement of section
24
36B(c)(2)(C)(ii) of such Code;
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•HR 1264 IH
(vi) whether such coverage satisfies
1
the requirements to qualify for one of the
2
affordability safe harbors promulgated by
3
the Secretary of the Treasury for purposes
4
of section 4980H of such Code; and
5
(vii) whether the employer reasonably
6
expects to be liable for any shared respon-
7
sibility payment under section 4980H of
8
such Code for such year;
9
(C) the months during the prospective re-
10
porting period that such coverage is available to
11
individuals described in clauses (i) through (iv)
12
of subparagraph (B);
13
(D) what waiting periods, if any, apply
14
with respect to such coverage; and
15
(E) a list of all employer identification
16
numbers of the employer for entities that em-
17
ploy employees within the employers control
18
group under subsection (b), (c), (m), or (o) of
19
section 414 of the Internal Revenue Code for
20
1986;
21
(2) processes necessary to ensure that Ex-
22
changes, the Federal Marketplace Data Services
23
Hub, and the Internal Revenue Service can securely
24
and confidentially access the information described
25
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•HR 1264 IH
in paragraph (1) as necessary to carry out their re-
1
spective missions, and to provide to the Secretary of
2
Health and Human Services additional information
3
relating to eligibility determinations for advance pay-
4
ment of the premium tax credits under section 36B
5
of such Code and the cost-sharing subsidies under
6
section 1402 of the Patient Protection and Afford-
7
able Care Act (42 U.S.C. 18071);
8
(3) a process to allow Exchanges to follow up
9
with employers in order to obtain additional reason-
10
ably necessary information relating to an employee’s
11
eligibility for such advance payment or such cost-
12
sharing subsidies, and to allow an employee to re-
13
ceive notification of any problem in verifying such
14
eligibility; and
15
(4) a process to allow employers using the sys-
16
tem to provide timely updates to the Federal Mar-
17
ketplace Data Services Hub regarding any cancella-
18
tion of coverage or significant change in coverage for
19
participating employees that would change the infor-
20
mation reported under paragraph (1).
21
(c) EMPLOYER NOTIFICATION OF EMPLOYEE EN-
22
ROLLMENT IN EXCHANGE PLANS.—Subparagraph (J) of
23
section 1311(d)(4) of the Patient Protection and Afford-
24
able Care Act (42 U.S.C. 18031(d)(4)(J)) is amended by
25
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•HR 1264 IH
striking ‘‘to each employer’’ and all that follows through
1
‘‘(and the effective date of such cessation); and’’ and in-
2
serting ‘‘to each employer—
3
‘‘(i) the name of each employee of the
4
employer who enrolls in a qualified health
5
plan for a plan year, or whose dependents
6
enroll in such a plan, at the time of such
7
enrollment; or
8
‘‘(ii) the name of each employee of the
9
employer described in subparagraph (I)(ii)
10
who ceases coverage under a qualified
11
health plan during a plan year (and the ef-
12
fective date of such cessation); and’’.
13
(d) EXEMPTION FROM REPORTING REQUIREMENT
14
UNDER INTERNAL REVENUE CODE OF 1986.—Section
15
6056 of the Internal Revenue Code of 1986 is amended
16
by redesignating subsection (f) as subsection (g) and by
17
inserting after subsection (e) the following new subsection:
18
‘‘(f) EXEMPTION.—If, through the system created
19
pursuant to section 3(a) of the Commonsense Reporting
20
Act of 2023, an employer provides prospective reporting
21
for any calendar year that meets the requirements of sec-
22
tion 3(b)(1) of such Act, such employer shall be treated
23
as satisfying the return requirements of subsections (a),
24
(b), and (c) for such year.’’.
25
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•HR 1264 IH
(e) THIRD-PARTY FILING.—An employer may con-
1
tract with a third party to make the report under sub-
2
section (b)(1) without affecting the employer’s treatment
3
as having satisfied the return requirements of subsections
4
(a) and (b) of section 6056 of the Internal Revenue Code
5
of 1986.
6
(f) ACCESS TO THE NATIONAL DIRECTORY OF NEW
7
HIRES.—Subsection (i)(3) of section 453 of the Social Se-
8
curity Act (42 U.S.C. 653) is amended by adding at the
9
end the following new sentence: ‘‘The Secretary of the
10
Treasury and the Secretary of Health and Human Serv-
11
ices shall have access to the information in the National
12
Directory of New Hires for purposes of administering sec-
13
tion 36B and 4980H of the Internal Revenue Code of
14
1986 and section 1402 of the Patient Protection and Af-
15
fordable Care Act (42 U.S.C. 18071). Subsection (k)(3)
16
shall not apply to information received for purposes of the
17
administration of such sections 36B and 4980H of such
18
Code and section 1402 of such Act.’’.
19
(g) IMPROVING EMPLOYEE ACCESS TO ACCURATE
20
EINS.—Not later than 1 year after the date of the enact-
21
ment of this Act, the Secretary of the Treasury shall de-
22
velop and implement guidance for allowing any employee
23
of an employer to receive, on request, the employer’s em-
24
ployer identification number for purposes of section 6056
25
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•HR 1264 IH
of the Internal Revenue Code of 1986. Employers shall
1
provide the employer’s employer identification number for
2
purposes of section 6056 of the Internal Revenue Code
3
of 1986 on employee pay statements.
4
(h) FUNDING FOR VOLUNTARY PROSPECTIVE RE-
5
PORTING SYSTEM.—There is authorized to be appro-
6
priated to the Secretary of the Treasury, the Secretary
7
of Health and Human Services, the Secretary of Labor,
8
and the Administrator of the Small Business Administra-
9
tion such sums as are necessary to carry out this section.
10
SEC. 4. PROTECTION OF DEPENDENT PRIVACY.
11
(a) IN GENERAL.—Paragraph (1) of section 6055(b)
12
of the Internal Revenue Code of 1986 is amended by add-
13
ing at the end the following flush sentence:
14
‘‘For purposes of subparagraph (B)(i), in the case of
15
an individual other than the primary insured, if the health
16
insurance issuer or the employer is unable to collect or
17
maintain information on the TINs of such individuals
18
(other than for purposes of this section), the Secretary
19
may allow the individual’s full name and date of birth to
20
be substituted for the name and TIN. In the event the
21
Secretary allows the use of the individual’s full name and
22
date of birth in lieu of the TIN, the Social Security Ad-
23
ministration shall assist the Internal Revenue Service in
24
providing data matches to determine the TIN associated
25
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•HR 1264 IH
with the name and date of birth provided by the Internal
1
Revenue Service with respect to such individual.’’.
2
(b) EFFECTIVE DATE.—The amendment made by
3
this section shall apply to returns the due date for which
4
is after the date that is 60 days after the date of the enact-
5
ment of this Act.
6
SEC. 5. ELECTRONIC STATEMENTS.
7
(a) IN GENERAL.—Subsection (c) of section 6056 of
8
the Internal Revenue Code of 1986 is amended by adding
9
at the end the following new paragraph:
10
‘‘(3) ELECTRONIC
DELIVERY.—An individual
11
shall be deemed to have consented to receive the
12
statement under this subsection in electronic form if
13
such individual has affirmatively consented at any
14
prior time, to the person who is the employer of the
15
individual during the calendar year to which the
16
statement relates, to receive such statement in elec-
17
tronic form. The preceding sentence shall not apply
18
if the individual revokes consent in writing with re-
19
spect to the statement under this subsection.’’.
20
(b) STATEMENTS RELATING TO HEALTH INSURANCE
21
COVERAGE.—Subsection (c) of section 6055 of the Inter-
22
nal Revenue Code of 1986 is amended by adding at the
23
end the following new paragraph:
24
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•HR 1264 IH
‘‘(3) ELECTRONIC
DELIVERY.—An individual
1
shall be deemed to have consented to receive the
2
statement under this subsection in electronic form if
3
such individual has affirmatively consented at any
4
prior time, to the person required to make such
5
statement (such as the provider of the individual’s
6
health coverage), to receive in electronic form any
7
private health information (such as electronic health
8
records), unless the individual revokes such consent
9
in writing.’’.
10
(c) EFFECTIVE DATE.—The amendments made by
11
this section shall apply to statements the due date for
12
which is after December 31, 2023.
13
SEC. 6. TIME FOR APPEAL.
14
(a) IN GENERAL.—Section 4980H(d) of the Internal
15
Revenue Code of 1986 is amended by adding at the end
16
the following new paragraph:
17
‘‘(4) TIME FOR APPEAL.—The Secretary shall
18
allow an applicable large employer 90 days from the
19
date of the first letter which allows the employer an
20
opportunity for administrative review of a proposed
21
employer shared responsibility payment under this
22
section by the Internal Revenue Service Independent
23
Office of Appeals to appeal the proposed assessment
24
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•HR 1264 IH
of such payment before issuing the notice and de-
1
mand for payment under paragraph (1).’’.
2
(b) EFFECTIVE DATE.—The amendment made by
3
this section shall apply to assessments in taxable years be-
4
ginning after the date of the enactment of this Act.
5
SEC. 7. STATUTE OF LIMITATIONS ON PENALTY ASSESS-
6
MENT.
7
(a) IN GENERAL.—Section 4980H(d) of the Internal
8
Revenue Code of 1986, as amended by section 6, is
9
amended by adding at the end the following new para-
10
graph:
11
‘‘(5) STATUTE OF LIMITATIONS ON PENALTY
12
ASSESSMENT.—With respect to an assessment of an
13
assessable payment under paragraph (1), the statu-
14
tory period for such assessment shall expire at the
15
end of the 3-year period beginning on the date the
16
employer files the return under section 6056 for the
17
calendar year with respect to which such payment is
18
determined.’’.
19
(b) EFFECTIVE DATE.—The amendment made by
20
this section shall apply to proposed assessments with re-
21
spect to which a letter described in section 4980H(d)(4)
22
[Text truncated for display. Full text available on Congress.gov.]