From the Hill: Effort to Halt ACA Penalties Unlikely to Pass
In a hearing on July 11, 2018, the U.S. House of Representatives Committee on Ways and Means approved H.R. 4616 on a party-line vote with 22 Republicans in favor and 15 Democrats opposed. Introduced by Representatives Devin Nunes (R-CA) and Mike Kelly (R-PA) in December 2017, the bill is titled: “To amend the Patient Protection and Affordable Care Act to provide for a temporary moratorium on the employer mandate and to provide for a delay in the implementation of the excise tax on high cost employer-sponsored health coverage.” As the name suggests, the bill would:
- Temporarily suspend all ACA Employer Shared Responsibility Payments (ESRPs) – commonly referred to as ACA penalties – related to Internal Revenue Code section 4980H, dating back to the beginning of calendar year 2015 through the end of 2018.
- Further delay for an additional year the implementation of an excise tax on high-cost benefit plans (also known as the Cadillac Tax) until 2023.
Employer Mandate Still in Effect
Unless and until the bill makes its way through Congress and is signed into law, the ACA Employer Mandate remains in effect, and applicable large employers (ALEs) must continue to offer qualifying, affordable coverage to their employees or risk being assessed an ESRP.
Both the employer shared responsibility and reporting provisions remain untouched, and Equifax strongly encourages employers to continue to comply to avoid the risk of penalties.
What Happens Next?
Sitting on Capitol Hill: H.R. 4616 has a long way to go before potentially becoming law.
Considering the current makeup of Congress, in particular the US Senate, it appears unlikely that this bill will be signed into law at this time.
Now that the bill has been reported to the full House of Representatives, Members may have an opportunity to debate the bill and make amendments before voting on it. If approved by the House, then it must be referred to the Senate for consideration. Only once the House and Senate each vote to pass the same version of the bill can it be sent to the President to be signed into law.
Currently, it appears unlikely that Republicans and Democrats would work together to move the bill forward.
As a strictly Republican-led effort, each chamber of Congress is likely to face a party-line vote related to any ACA repeal attempts. Although it is conceivable this bill could pass the House with only Republican support, the Senate poses a greater hurdle: Even if every Republican Senator voted in favor of the bill, it would still need the support of nine Democrats to achieve the three-fifths majority required to overcome a filibuster.
Forms 1094 and 1095 Reporting Provisions Unaffected: Please note that the ACA reporting provisions under Internal Revenue Code sections 6055 and 6056 are not impacted by the potential passage of H.R. 4616. In the bill’s current state, even if the bill becomes law, ALEs will still be required furnish Form 1095-C statements to employees and individuals who enrolled in self-insured employer-sponsored plans as well as file Forms 1094-C and 1095-C returns with the IRS to meet their reporting obligations and avoid compliance risk.
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.
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