The Employer Mandate — along with all associated reporting obligations and penalties — will live on throughout Tax Year 2017, and likely beyond. This news emerged in the wake of the showdown between the recently introduced American Health Care Act and the incumbent Affordable Care Act.
The short-lived AHCA legislation came to an anticlimactic end on Friday, as Congress neglected to hold a vote on the bill after failing to gain adequate support. Following the non-vote, President Trump made it clear he is not open to further negotiations and Speaker Ryan indicated the House would be moving on from healthcare reform entirely. The speaker further stated, “the ACA remains the law of the land” likely until after the 2018 midterm elections.
What’s next for reporting?
President Trump’s executive order to “ease the burdens” of the ACA still stands, and executive agencies including the IRS and the Department of Health and Human Services will continue to act upon it. So far, the IRS has made slight adjustments to individual reporting. However, the IRS does not have the discretion to eliminate reporting and associated penalties for businesses and employers altogether due to constitutional restraints.
Although neither the IRS nor HHS has announced any modifications to reporting by Applicable Large Employers, many have speculated about possible changes that may be implemented:
- Extension of “good faith” reporting
- Reduction in reporting penalties
- Granting widespread exemptions from or “delaying” the employer and individual mandates
- Relaxing electronic reporting validations
But these specific modifications have not been proposed by either agency. They simply illustrate the nature of regulatory changes that may be proposed in the future. Reporting obligations were discussed when the AHCA was being constructed; as such, the IRS will likely maintain these requirements in their current forms for the foreseeable future.
What’s next in Congress?
The option for targeted legislative action remains open. Certain legislators have already suggested individual bills to implement some of the less controversial provisions of the AHCA, like the increase in HSA contribution limits. However, these bills will likely center upon substantive provisions, rather than addressing reporting obligations.
The bottom line: Absent legislation that specifically eliminates employer reporting, the basic obligation to report remains – subject to IRS regulatory modifications.
Read more about recent ACA regulatory legislative updates and key information on our blog:
- ACA Regulatory Update: Republicans Mount Opposition to Proposed Legislation
- ACA Regulatory Update: Employer Mandate on Life Support
- ACA Update: IRS Tweak to Individual Reporting – What It Means
Additional resources to help you manage your ACA obligations:
- SHRM: As ACA Remains Law, Focus Turns Back to Regulatory Relief
- Employer Linc: The Affordable Care Act is Here to Stay
- The National Law Review: Health Care Reform Update – American Health Care Act Shelved
The post ACA Regulatory Update: ACA Remains the Law of the Land for US Employers appeared first on Sovos Compliance.
About the Author
Tom Hospod is a member of the Tax Research Team for the Direct Tax division at Sovos Compliance, where his main areas of focus are Tax Withholding and Automatic Exchange of Information (AEOI). Prior to Sovos, Tom worked as a legislative aide in the Massachusetts House of Representatives. He also has experience in securities law—focusing on broker-dealer disputes and representing clients in FINRA arbitration. Tom is a member of the Massachusetts Bar, earned his B.A. from Boston College and his J.D. from the University of Miami.More Content by Tom Hospod