As conflicting opinions of an ACA Repeal continue to loom overhead, from the Republican viewpoint, a repeal seems inevitable. However, this does not translate to an elimination of ACA compliance for at least the next two years. While President-Elect Trump and the majority Republican Congress have made various announcements about working toward some type of ACA Repeal and Replacement Plan, even if such a Plan is passed now, ACA compliance will still be necessary through at least 2018.
On January 5th, Republican Congressman Chris Collins advised the repeal process would begin in June or July of this year, calling the repeal to be done “quickly.” Just how quickly? At best, two years. “There’s not going to be any changes in 2017. There’s not going to be changes in 2018,” he explained. “So we’re talking about new plans in 2019 or later.” Collins didn’t advise on which parts of the ACA would remain (though there may be some), but did specify a transition period to come.
For employers, this means that, for reporting years 2015-2018, even if the ACA Employer Mandate is repealed, compliance with it will still be in effect for another two years. This means that applicable large employers will still need to offer minimum essential coverage at an affordable cost to full-time employees as well as report on their offers of coverage to the IRS. Should slips in compliance occur, penalties will still be enforced, even after any repeal of the ACA Employer Mandate takes effect.
Despite moves towards a repeal on the part of the GOP, Democrats are still open to a discussion about reforming the ACA as opposed to repealing it. Democratic Virginia Senator Tim Kaine suggested the conversations should start now about a potential reform. “The time to work to make improvements is right now before a repeal vote,” he said. Democratic West Virginia Senator Joe Manchin added that the amount of money lost in ACA-related taxes upon repeal is to the tune of $2.35 trillion dollars lost in revenue.
Since its passing, ACA added excise taxes on medical devices, the “Cadillac Tax” (which still has yet to come into effect), the investment income tax, Medicare tax, the penalties for noncompliance with the Individual Mandate (for individuals who fail to obtain health coverage), and for noncompliance with the Employer Mandate.
Whether the repeal does in fact happen or a compromise for a reform occurs prior to this Summer, employers should continue to maintain ACA compliance until told otherwise.