What the Healthcare is going on with ACA?

We all know by now that the current administration is very motivated to repeal and replace the Affordable Care Act (ACA). It was a campaign promise of our president and it has been a long standing wish of the Republican Party. The Executive Order signed in late January made the intent very clear. Changes are coming although it’s still unclear what those changes will be and what the impact will be for U.S. employers in the future.

Lots of rhetoric has been flying around, some applauding and some opposing changes. The 2 draft bills that came out this past Monday and the reactions yesterday make clear yet again that repealing and replacing the ACA is not an easy task. With so much confusion and speculation about the future of ACA, many employers are wondering whether or not it’s still worth preparing the required 2016 forms for the IRS and taking the time to capture necessary data for 2017.

What do we know for sure?

The ACA has not been repealed yet. The law stands – for now. That means employers must remain ACA compliant – for now.

  1. ACA forms are still required for 2016 reporting. Businesses must still show compliance by submitting IRS forms 1095-C and 1094-C, even if after the reporting deadline. Making a good faith effort is better than no effort at all.
  2. For 2017, businesses must continue to offer affordable healthcare to full-time employees – tracking when an employee becomes eligible for health insurance and whether the health insurance offered is affordable, is still recommended.

Employers must continue to follow the applicable requirements or be at risk for incurring costly penalties for non-compliance. This strategy is a very important point for employers to consider because the costs for non-compliance can greatly outweigh the minimal amount of time and cost it takes to complete the forms and deliver them to employees and the IRS and keep tracking compliance in 2017 – especially with Integrity ACA which automates much of this.

What about this proposed bill – the American Healthcare Act?

Since this is a budget reconciliation bill, it can’t change the law per se. Lawmakers are limited to changing provisions around revenue and spending. With regards to the Employer Mandate, the proposal is to repeal the coverage penalties. Meaning there is no “stick” for employers to offer affordable healthcare to full time employees. However, the mandate itself and the reporting requirements (and penalties) remain. This is an interesting conundrum for employers: the mandate is still there but the coverage penalties are gone; do they still need to report on what coverage they offered to whom and at what cost? With premium tax credits also part of this bill, some form of employer reporting seems to remain anyway.

The consensus is that the next few weeks/ months will be a wild roller coaster ride with lots of posturing, lots of changes and who knows where this will end up.

For now, we recommend business as usual around ACA. We’ll keep you posted as we follow changes in the law and related IRS regulations and learn more.