If you are wondering how the IRS will invade your health privacy.......there is software for that. Given the miserable rollout for health.gov you may be in for a surprise. Most likely there will be many errors. What will the dispute process be? The actual workings of plans such as they may be at March 1, 2016 reveals high deductibles and co-payments. High enough that it will pay for people to ignore the requirements for mandatory health care insurance, and just pay the fine for several years. We have not as yet calculated the cost curve.
The Affordable Care Act’s Reporting Electronic Backbone—The AIR System
For the last half of 2015, we spent a good deal of time explaining the Affordable Care Act reporting requirements that applied to carriers and large employers. A compilation of these posts, which generally address the content of the ACA reporting requirements, is available here. This post examines the how of ACA reporting. In particular, it provides a primer on the electronic filing system—referred to as the Affordable Care Act Information Return System (AIR)—that the IRS has developed and deployed to facilitate the submission of reporting data to the government.
AIR’s Antecedent—The IRS Filing Information Returns Electronically (FIRE) system
When explaining the ACA’s filing requirements, we found it helpful to point to the similarities between the payroll reporting on IRS Form’s W-2 (“Wage and Tax Statement”) and W-3 (“Transmittal of Wage and Tax Statement”), and the Forms 1094-B and 1095-B (that apply to providers of minimum essential coverage) and Forms 1094-C and 1095-C (that apply to applicable large employers). Form W-2 is (all too) familiar to taxpayers of all stripes as the form that employers provide to them in connection with the filing of their annual Form 1040 (“U.S. Individual Tax Return”), and employers recognize Form W-3 as the form they use to provide copies of W-2s to the government. Forms 1094-B and 1095-B, and 1094-C and 1095-C, operate in a similar fashion. Forms 1095-B and 1095-C are individualized forms that are provided to employees, and Forms 1094-B and 1094-C are used to transmit information reflected on Forms 1095-B and 1095-C to the government.
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