Employer Reporting Improvement Act

Floor Speech

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Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3801) to amend the Internal Revenue Code of 1986 to streamline and improve the employer reporting process relating to health insurance coverage and to protect dependent privacy, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 3801

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 ``Employer Reporting Improvement Act''. SEC. 2. TIN REPORTING FLEXIBILITY.

(a) In General.--Section 6055(b)(1) 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 any individual whose name is required to be set forth in a return under subsection (a), if the person required to make a return under such subsection is unable to collect information on the TINs of such individuals, the Secretary may allow the individual's full name and date of birth to be substituted for the name and TIN.''.

(b) Effective Date.--The amendment made by this section shall apply to returns the due date for which is after December 31, 2024. SEC. 3. ELECTRONIC STATEMENTS.

(a) In General.--Section 6056(c) 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 such consent in writing.''.

(b) Statements Relating to Health Insurance Coverage.-- Section 6055(c) 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, to receive such statement in electronic form. The preceding sentence shall not apply if 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, 2024. SEC. 4. TIME FOR RESPONSE.

(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 response.--The Secretary shall allow an applicable large employer at least 90 days from the date of the first letter which informs the employer of a proposed assessment of the employer shared responsibility payment under this section to respond to the proposed assessment before taking any further action with respect to such proposed assessment.''.

(b) Effective Date.--The amendment made by this section shall apply to assessments proposed in taxable years beginning after the date of the enactment of this Act. SEC. 5. STATUTE OF LIMITATIONS ON PENALTY ASSESSMENT.

(a) In General.--Section 6501 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:

``(n) Assessable Payment of Employer Shared Responsibility.--In the case of any assessable payment under section 4980H, the period for assessment shall expire at the end of the 6-year period beginning on the due date for filing the return under section 6056 (or, if later, the date such return was filed) for the calendar year with respect to which such payment is determined.''.

(b) Effective Date.--The amendment made by this section shall apply with respect to returns which are due after December 31, 2024.

I appreciate the opportunity to say a few words about the Employer Reporting Improvement Act before us today, introduced by my good friends, Ways and Means colleagues, Representatives Adrian Smith and Mike Thompson. This is a straightforward and effective bipartisan solution to provide small businesses with relief from cumbersome Affordable Care Act reporting requirements.

Under current law, every year, to determine compliance with ACA requirements, employers have to report to the IRS information about the health insurance coverage they have provided for their employees.

As part of that process, employers are required to submit their employee and their spouse or dependents' personal tax identification numbers or Social Security numbers. However, here is the catch: If, during this process, the employer unknowingly submits incorrect information, or if the IRS believes that an employee is wrongfully claiming a premium tax credit, the employer faces a significant financial penalty.

Making matters worse, the window of opportunity that employer has to appeal is short, while the statute of limitations on that violation is limitless.

On average, the IRS takes anywhere between 18 to 24 months, 2 years, to crunch the numbers on all this data they receive. That means the small business is left in limbo waiting to hear whether the government will find them in violation of the law.

The bill before us today gives employers flexibility about what personal information they have to provide on behalf of their employees and their families. It extends the appeal window for any potential violation and establishes a statute of limitations so those small businesses, who have limited resources to begin with, can navigate these waters with less of a burden.

I thank my colleagues on both sides of this aisle for supporting this measure to provide relief to our small business job creators.
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Mr. SMITH of Missouri. Mr. Speaker, I am prepared to close. I reserve the balance of my time.

America's small businesses have had it pretty tough these past few years. They are asking that Congress do its part to bring a measure of relief.

The Employer Reporting Improvement Act is one step we can easily take to shrink the burden Washington imposes on them and their employees.

The mom-and-pop shops that line America's Main Streets should not have to operate under fear that Washington is going to come after them for a clerical error. When they are faced with a potential penalty, they ought to have the time to make their case. It is a simple matter of fairness.

This measure has strong bipartisan support. It sailed out of the Ways and Means Committee on a vote of 37-0.

I urge my colleagues to support this legislation, and I yield back the balance of my time.

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