Obama’s Budget Proposal Calls for Strict Enforcement of ACA Penalties for Employers
President Obama’s Fiscal Year 2016 federal budget proposal, released on February 2, 2015 by the White House Office of Management and Budget (OMB), includes a specific provision where the IRS will ramp up enforcement efforts to “address noncompliance” including oversight of various fees, tax credits and the individual and employer responsibility provisions of the Affordable Care Act (ACA). According to the Treasury Department’s Budget in Brief, this initiative includes a $60.8 million initial investment in traditional revenue-producing activities that are expected to annually produce additional enforcement revenue of $181.7 million.
The Budget proposes hiring 432 full-time employees to enforce ACA statutory requirements. Audits are expected to be the primary enforcement effort, although a portion of those employees may be handling the assessment and appeal process associated with the annual reporting requirements.
The Congressional Budget Office (CBO) estimates that employer shared responsibility penalties will produce $8 billion in 2016 (relating to 2015 penalties). From 2016-2024, the CBO estimates that penalty payments will total $139 billion.