As employers and their third-party administrators begin to wrap-up their Patient Protection and Affordable Care Act (“ACA”) reporting for the 2018 tax year, we’ve started to receive questions about what comes next. As we discussed here, with the implementation of the Tax Cuts and Jobs Act of 2017 (the “Act”), the ACA’s “individual mandate” effectively lost its teeth—while the ACA still contains a requirement that individuals obtain health insurance coverage, the Act reduced the penalty for not doing so to $0.
This led to confusion initially for individuals who assumed the reduced penalty would become effective immediately (i.e., for 2018); however, this provision of the Act did not become effective until 2019. Still, confusion remains, and for employers. We’ve received several questions from clients about whether, given the Act’s changes, ACA reporting will be required for the 2019 tax year and beyond. This is partly due to the effective end of the individual mandate, and partly due to uncertainty over whether the ACA’s other penalty provisions remain intact. In short, with respect to the latter, they do. As of this writing, employers with 50 or more full-time or full-time equivalent employees must continue to provide minimal essential overage that is affordable and provides minimum value to their full-time employees, or risk penalties under the ACA’s “employer mandate”. (Similarly, the ACA’s insurance mandates for coverage of dependents until age 26, no exclusions for pre-existing conditions, etc. also remain in place.) Certain states also have their own individual mandates that remain in effect.
The implementation of, and effective dates for, the various provisions of the ACA have been a moving target since its adoption, and it appears the ACA is poised to continue its evolution based on the federal election results in the coming years. We also understand that the Internal Revenue Service is looking at whether there will be changes regarding the requirement to provide employees with their annual Form 1095-Cs going forward (i.e., the reporting of offers of coverage to employees that employees may use to prepare their individual tax returns). Regarding the 2019 reporting, however, we are advising employers that the ACA remains the “law of the land”, and to assume that reporting for 2019 will look a lot like the 2018 reporting until we hear differently.
We will, of course, provide an update if new guidance on the future of ACA reporting is provided this year, and remain available for any past, present, or future ACA reporting questions our clients may have.