As part of tax reform legislation passed by Congress, the individual mandate provision in the ACA requiring every American citizen to obtain health insurance or pay an annual financial penalty is history, with the White House ready to sign off on the bill.
However, it is doubtful that the loss of the individual mandate will discourage some Americans from obtaining insurance through the ACA. Low-income families, in particular, have been shielded from insurance premium increases by Premium Tax Credits offered by the government to offset the impact of these increases.
While many are debating the true impact of ending the individual mandate on the individual health insurance market, the mandate for employers to provide health insurance to their employees remains in place.
The IRS has already signaled its intention to enforce ACA compliance. In November, the agency began issuing Letter 226J notices assessing tax penalties on those organizations it believes did not comply with the ACA in 2015 based on information filings submitted to the agency. Some of these penalties have been in the millions of dollars.
Click here to download an infographic that provides more information on IRS Letter 226J.
If you haven’t done so already, now is the time to assess your compliance with the ACA. For employers who have not yet received an IRS penalty notice, but are concerned that they might, consider reviewing their 2015 and 2016 IRS filings to identify potential problem areas that need to be addressed. This is particularly important because the threshold for offering healthcare coverage for full-time employees increased from 70 percent in 2015 to 95 percent in 2016 and thereafter.
Consider hiring an outside expert experienced in this area to help you understand if you are at risk for possible ACA tax penalties and to avoid future penalties by ensuring that your organization’s process for gathering information for ACA filings for submission with the IRS for the 2017 tax year will meet all requirements of the ACA.
