Don’t let the new tax plan fool you: ACA employer mandate remains intact

Despite the administration touting that the new Tax Cuts and Jobs Act “essentially” repeals the health law, this is not the case. Let’s separate fact from fiction:

Employer Mandate stands

Employer obligations remain unchanged.

What is NOT going away as part of this new law:

  • The ACA employer mandate (and the enforcement of that mandate): all US employers with 50 or more full-time employees must continue to offer their full-time workers ACA-compliant health coverage.
  • ACA employer reporting: these employers must continue to provide proof of coverage to the IRS with year-end forms 1095-C and 1094-C.
  • ACA health plan mandates (essential benefits, cost sharing limits etc.)
  • The Cadillac Tax on the cost of health coverage

Group health plans are also largely unaffected by the changes.

Individual Mandate repealed

The requirement that individuals are required to have ACA-compliant health coverage or else pay a penalty is repealed in the sense that the penalties are reduced to zero. However, be aware that this repeal only goes into effect in 2019!

For employers this could mean:

  • Premiums in the individual market could rise, pushing employees to take a new look at employer coverage
  • Employees who elected employer coverage may feel they no longer need to maintain it – if these are young, healthy employees this may have an adverse impact on employer’s health plan costs.

What’s next?

  • Plan on ACA reporting for 2017 and beyond

Reporting for 2017 is certainly required and given the IRS’s clear intention to enforce the mandate, expect reporting to continue into 2018 and possibly beyond. Make sure you have the systems and processes in place to do so accurately and efficiently – Integrity Data’s ACA reporting services can help.

  • Keep an eye on developments in 2018

The individual mandate and the employer mandate do go hand in hand so the repeal of the individual mandate may lead to at least a softening of the employer mandate – for example, making the reporting easier for employers by simplifying it. This won’t happen quickly but it is definitely worth keeping an eye on.