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As we enter the third week of government shutdown, we’re on track to surpass the longest shutdown in U.S. history.
The shutdown affects many government agencies, including the IRS. While IRS enforcement may stop during the shutdown, employers must still comply with the Affordable Care Act’s (ACA) Employer Shared Responsibility Provisions (ESRP), commonly referred to the Employer Mandate, to avoid IRS penalty assessments in the future.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs), organizations with 50 or more full-time employees and full-time equivalent employees, are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to IRS 4980H penalties.
Democrats have moved to defend the ACA. A group of 17 Democratic state attorneys general formally appealed the decision. With a majority in the House of Representatives, Democrats have filed a motion to intervene in the court case in U.S. District Court for the Northern District of Texas, Fort Worth Division, in which district Judge Reed O’Connor ruled that the ACA was unconstitutional. Judge O’Connor’s reasoning relied heavily on Congress’s decision to reduce the federal Individual Mandate penalty to $0, stating that the coverage mandate “is essential to and inseverable from the remainder of the ACA.”
In finalizing his findings, Judge O’Connor stated that the ACA would remain in effect during the appeals process.
Despite the legal wrangling, Americans continue to take advantage of the ACA as demonstrated by results of the 2019 open enrollment season. Even with removal of the federal Individual Mandate penalty, which required that Americans have health insurance or be subject to a penalty, and the reduced open enrollment window, the initial snapshot numbers from the 2019 plan year enrollment are strong.
According to the Centers for Medicare and Medicaid (CMS) a total of 8.4 million Americans selected or re-enrolled in plans using the HealthCare.gov platform, only 4% lower than the 2018 open enrollment period. In addition, over 2 million of the enrollees were new consumers, meaning they had never previously enrolled in a plan through the federal health exchange. This snapshot from CMS also does not include plan selections from State-based Exchanges that are not using the HealthCare.gov platform. Final 2019 enrollment data will be released in March will include data for states that operate their own marketplaces. To see the final weekly enrollment snapshot provided by CMS on January 3, 2019, click here.
While the duration of the government shutdown remains uncertain, organizations should carry on with a business as usual mentality as failing to comply with the ACA could be costly.
At this time, there is no indication that the 2019 deadlines for ACA compliance for the 2018 tax year will change. You can get an infographic on the important IRS filing dates for 2019 by clicking here.
