ACA Reporting Faces Uncertain Future

On his first night in the White House, President Trump struck a potentially heavy blow to the Affordable Care Act (ACA). The repercussions for employers could be significant. 

Last Friday, the president signed an executive order instructing government agencies to “ease the burden” of the ACA. The language of the order was vague—but it effectively asks the IRS and other agencies tasked with enforcing the healthcare law to stand down whenever they legally can:

“The heads of all other executive departments and agencies...shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
 

For employers, the order throws this year’s round of ACA reporting into uncertainty. The IRS, charged with enforcing the individual mandate and employer reporting requirements, may now face pressure to soften or waive penalties associated with the ACA.

A Refresher on ACA Reporting

Under the ACA, employers with 50 or more full-time employees are required to offer benefits. To demonstrate compliance with the requirement, they must file IRS Forms 1095-C and 1094-C. The former is a statement outlining what coverage was offered to employees; the latter is a coversheet with company and contact information. 

Last year’s inaugural round of ACA reporting was fraught with delays. The IRS continually pushed deadlines and decided to relax penalties for those employers who made a good faith effort to comply with the rules. This year, companies are required to electronically file these forms with the IRS by March 31. Paper forms must be submitted a month earlier, on February 28.

With the first reporting deadline just weeks away, the HR and benefits community will keep a close eye on the IRS and events in Washington. 

HR Action Item:

The IRS has yet to comment on how it will uphold President Trump’s order. Until that happens, proceed as you would have otherwise with your 1095-C and 1094-C reports. If you have one, reach out to your broker or ACA reporting administrator to ensure they are aware of the executive order.