ACA Employer Mandate Remains, Tax Bill Repeals Only Individual Mandate

ACA Employer Mandate Remains, Individual Mandate Repealed

On December 20, 2017, the House of Representatives held a final vote approving the Tax Cuts and Jobs Act, a tax bill that includes the repeal of the individual shared responsibility provision of the Affordable Care Act (ACA), commonly referred to as the individual mandate. The individual mandate required all United States taxpayers who did not meet an enumerated exemption to either enroll in minimum essential health coverage or pay a penalty for months without coverage or an exemption.

ACA provisions also contain an employer mandate, which requires applicable large employers to offer minimum essential coverage that is affordable and provides minimum value to all their full-time employees to avoid risk of penalties for not complying with Internal Revenue Code (IRC) section 4980H. Additionally, pursuant to IRC sections 6055 and 6056, applicable large employers must report offers of coverage each year by furnishing Form 1095-C statements to employees and individuals enrolled in their self-insured health plans and filing Forms 1094-C and 1095-C information returns with the IRS.

Does Repealing the Individual Mandate Also Repeal the Employer Mandate?

Put simply: no. The newly passed legislation only eliminates the penalties associated with not having qualifying health coverage, which has no direct impact on the employer mandate. The employer shared responsibility and reporting provisions remain untouched, and the IRS is actively sending out Letter 226J to applicable large employers, proposing payments for not offering qualifying coverage to their full-time employees. The employer mandate is still very much in effect, and Equifax strongly encourages employers to continue to comply to avoid the risk of penalties.

Now is not the time for ALEs to risk non-compliance. If your organization needs support in managing ACA reporting for prior, current, or future years, contact the specialized ACA team at Equifax today.