Commonsense Reporting Act of 2022
Bill: S.3673 | Sponsor: Sen. Warner, Mark R. (D-VA)
Policy area: Taxation

Summary:
Commonsense Reporting Act of 2022
This bill addresses the eligibility verification process for the premium assistance tax credit and cost-sharing subsidy under the Patient Protection and Affordable Care Act (PPACA). It requires the Department of the Treasury to develop and implement a reporting system that allows employers to voluntarily report information about their health plans for the current plan year prior to the beginning of open enrollment. The bill also allows electronic transmission of employee and enrollee statements and permits Treasury to accept full names and dates of birth in lieu of dependents' and spouses' Social Security account numbers.
The bill also allows certain large employers who do not offer their employees minimum health care coverage 90 days to appeal an assessment for not providing such coverage.
The Government Accountability Office must evaluate (1) for the period beginning on January 1, 2015, and ending on December 31, 2020, the notification of employers by PPACA exchanges of the eligibility of employees for advance payments of the premium assistance tax credit or cost-sharing subsidies; and (2) for calendar year 2023, the functionality of the prospective reporting system established by this bill, including the accuracy of information collected.

To streamline the employer reporting process and strengthen the 
eligibility verification process for the premium assistance tax credit 
                       and cost-sharing subsidy.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commonsense Reporting Act of 2022''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) 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.
            (2) Such collaboration should strike an appropriate balance 
        between sufficient reporting to enforce the law and protecting 
        the privacy of individuals.

SEC. 3. VOLUNTARY PROSPECTIVE REPORTING SYSTEM.

    (a) 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.
    (b) Requirements.--The system created under subsection (a) shall 
include--
            (1) 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--
                    (A) the name and employer identification number for 
                purposes of section 6056 of the Internal Revenue Code 
                of 1986 of the employer;
                    (B) a certification of--
                            (i) 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;
                            (ii) whether such coverage is offered to 
                        part-time employees of the employer;
                            (iii) whether such coverage is offered to 
                        dependents of employees;
                            (iv) whether such coverage is offered to 
                        spouses of employees;
                            (v) whether such coverage meets the minimum 
                        value requirement of section 36B(c)(2)(C)(ii) 
                        of such Code;
                            (vi) 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
                            (vii) whether the employer reasonably 
                        expects to be liable for any shared 
                        responsibility payment under section 4980H of 
                        such Code for such year;
                    (C) the months during the prospective reporting 
                period that such coverage is available to individuals 
                described in clauses (i) through (iv) of subparagraph 
                (B);
                    (D) what waiting periods, if any, apply with 
                respect to such coverage; and
                    (E) 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;
            (2) 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);
            (3) 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
            (4) 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).
    (c) 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 ``to 
each employer--
                            ``(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''.
    (d) 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.''.
    (e) 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.
    (f) 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.''.
    (g) 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.
    (h) 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.

SEC. 4. PROTECTION OF DEPENDENT PRIVACY.

    (a) 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:
    ``For purposes of subparagraph (B)(i), in the case of an individual 
other than the primary insured, if the health insurance issuer or the 
employer is unable to collect or maintain information on the TINs of 
such individuals (other than for purposes of this section), the 
Secretary may allow the individual's full name and date of birth to be 
substituted for the name and TIN. In the event the Secretary allows the 
use of the individual's full name and date of birth in lieu of the TIN, 
the Social Security Administration shall assist the Internal Revenue 
Service in providing data matches to determine the TIN associated with 
the name and date of birth provided by the Internal Revenue Service 
with respect to such individual.''.
    (b) 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.

SEC. 5. ELECTRONIC STATEMENTS.

    (a) 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.''.
    (b) 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.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to statements the due date for which is after December 31, 2021.

SEC. 6. TIME FOR APPEAL.

    (a) 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).''.
    (b) 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.

SEC. 7. STATUTE OF LIMITATIONS ON PENALTY ASSESSMENT.

    (a) 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.''.
    (b) 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.

SEC. 8. GAO STUDIES.

    (a) Study of First Years of Employer Reporting.--
            (1) 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--
                    (A) 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--
                            (i) the data elements included in the 
                        employer notification;
                            (ii) 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;
                            (iii) whether employers report that such 
                        notifications provided sufficient and relevant 
                        information for them to make appropriate 
                        decisions about whether to utilize the appeals 
                        process;
                            (iv) the total number of notifications sent 
                        to employers and the timeline of when such 
                        notifications were sent;
                            (v) differences in the notification process 
                        between the marketplace facilitated by the 
                        Federal Government and the State-Based 
                        Marketplaces; and
                            (vi) challenges that have arisen in the 
                        notification process, and recommendations to 
                        address these challenges; and
                    (B) 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)).
            (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).
    (b) Study of Prospective Reporting System.--
            (1) 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.
            (2) 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).

SEC. 9. TAX COMPLIANCE.

    (a) 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''.
    (b) 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.
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