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ACA Awaits Repeal or Repair

ACA Awaits Repeal or Repair

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ACA Update on October 13, 2017: Trump Announces two Changes to ACA

After his electoral win in November, President Donald Trump, buoyed by Republican majorities in the House and the Senate, vowed to act quickly to repeal and replace the Affordable Care Act (ACA). Pres. Trump has now been in office for a month, and Republicans have not yet voted to repeal the ACA, and have not agreed upon a potential replacement, leaving the date of “repeal and replace” somewhere in the uncertain future. stethoscope

Early strategies

When the current Congress convened in January, it moved quickly to begin the “repeal” portion of “repeal and replace” by passing a budget resolution. Because the GOP does not have a filibuster-proof majority in the Senate and cannot count on votes from Democrats to repeal the ACA, Republicans have decided to utilize a procedure known as budget reconciliation to dismantle it.

By using this procedure, Congress can pass a bill to repeal the ACA with a simple majority in the Senate. The reconciliation instructions in the budget resolution directed various committees to come up with proposals to repeal the ACA and submit them to the budget committees of the House and Senate. The reconciliation proposals would then be crafted into a bill by the budget committees, and the reconciliation bill would then need to pass both the House and the Senate before being signed by the President.

Potential outcomes

However, the provisions of the bill passed this way must target elements of the ACA that have a federal budgetary effect. Therefore, the ACA provisions that allow children to stay on their parents’ insurance through age 26 and the requirement that insurers cover preexisting conditions could not be eliminated using this procedure. Nor could the individual and employer mandates be eliminated in this way, but the amounts of the penalties could be reduced to zero, eliminating them in all but name.

Repeal or repair?

Republicans originally called for reconciliation proposals to be submitted to the budget committees by January 27, but that date has come and gone. Congressional Republicans continue to work on “repeal and replace,” but many of them have begun talking about “repair” of the ACA, rather than repeal, as they recognize the difficulty of legislating in this area.

In an interview with Fox News’ Bill O’Reilly on February 5, President Trump said that replacement could take until 2018.

O’Reilly asked “Can Americans in 2017 expect a new health care plan rolled out by the Trump administration this year?”

Trump responded, “We’re going to be putting it [the new healthcare plan] in fairly soon, I think that … by the end of the year at least the rudiments but we should have something within the year and the following year.”

Employer mandates remain in place

One thing that has become clear during the first month of the Trump presidency is that repealing the ACA is a much tougher prospect than many had thought. Despite the uncertainty with regard to the long-term future of the ACA, the current reality is that the ACA and the employer mandate remain the law of the land, and employers should continue to comply with the law’s requirements. Applicable Large Employers should file IRS Forms 1094 and 1095 no later than the March 31 if filing electronically, or February 28, if filing paper forms. Forms 1095-C must be furnished to employees no later than March 2. Large employers should continue to comply with the employer mandate, measure their full-time employees, and offer minimum essential coverage providing minimum value to those employees and their dependents.

Paycom will continue to monitor executive and Congressional action regarding the ACA closely and stands ready to help our clients maintain compliance.

 


Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Deadline Extended

Employer Deadline Extended for Furnishing 2017 ACA Forms

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Distribution of 2017 Affordable Care Act (ACA) Forms 1095-B or -C to your employees has been extended.

As issued in Notice 2018-06, the IRS has extended the deadline from Jan. 31 to March 2. (However, the deadline to provide Forms W-2 and 1099 to employees and contract workers remains as Jan. 31.)

Filing deadlines unchanged

While the deadline to furnish forms was extended, the filing deadlines remain the same: Feb. 28 for paper forms, and April 2 for electronic forms.

IRS Notice 2018-06 emphasizes that employers who do not comply with the due dates for furnishing or filing are subject to penalties under sections 6722 or 6721.

Good-faith transition relief extended

The IRS also announced the extension of good-faith transition relief. This may allow an employer to avoid some penalties if it can show that it made good-faith efforts to comply with the information reporting requirements for 2017.

This relief applies only to incorrect and incomplete information reported on the ACA forms, and not to a failure to file or furnish the forms in a timely manner. Additionally, the IRS stated it does not anticipate extending either the good-faith transition relief or the furnishing deadline in future years.

Contact a trusted tax professional if you have questions on how this may affect your business specifically.

Click here to read more about how the ACA is affect by the new Tax Cuts and Jobs Act.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

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Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

Employers Unaffected by ACA Changes in New Tax Law

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On December 22, President Trump signed the Tax Cuts and Jobs Act. The bill includes a provision that reduces the penalty for not complying with the Affordable Care Act’s (ACA) individual mandate to $0, effectively removing the penalty for individuals who do not have health insurance coverage after the effective date of Jan. 1, 2019.

However, this update will not impact employers, since the law does not remove the employer mandate (the requirement that large employers offer health insurance coverage to their full-time employees or pay a penalty) or the associated employer reporting requirements. Large employers subject to the mandate still face penalties if they fail to comply with either, and the IRS has begun sending out notices with preliminary assessments of the employer shared responsibility penalty for tax year 2015.

Employers subject to the employer mandate should continue to comply and be prepared to file Forms 1094 and 1095 with the IRS in accordance with the normal deadlines.

For the 2017 tax year, the deadlines to provide Forms 1095-C to employees is Jan. 31, 2018.  The deadline to file Forms 1094-C and 1095-C with the IRS is Feb. 28, 2018 if filing paper forms, and April 2, 2018, if filing electronically.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.

Posted in ACA, Blog, Compliance, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

ACA Employer Shared Responsibility Payments

IRS Quietly Prepares to Assess ACA Employer Shared Responsibility Payments

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Late last week, without announcement, the IRS amended a FAQ about its planned process for assessing employer shared responsibility payments (ESRPs) under the Affordable Care Act (ACA). Previously, the document suggested that further guidance would be forthcoming, prior to notifying affected applicable large employers (ALEs) about potential penalties owed under the federal health care law’s employer mandate.

That statement is now gone. In its place are several questions and answers detailing how the IRS will notify companies that they may owe an ESRP. In addition, the IRS intends to send assessments for the 2015 tax year in “late 2017,” which gives the agency approximately six weeks to do so.

Deadlines

The IRS notification will take the form of Letter 226J, which will include a month-by-month payment summary and a list of employees who:

  • were full-time employees for at least one month of the tax year
  • also received a premium tax credit
  • and did not allow the employer to qualify for an affordability safe harbor or other relief

While Letter 226J will indicate the employer’s deadline to respond, recipients generally will have 30 days from the letter’s printed date to contest its information. Then, following correspondence between the IRS and the ALE, if the agency determines the employer indeed is liable for an ESRP, the IRS will issue a demand and instructions for payment, via Notice CP 220J.

The FAQ’s changes to describe specific procedures and deadlines represent the clearest indication we have received that the IRS soon will notify ALEs that they may owe an ESRP for 2015. If such notifications are sent within the next few weeks, it will mark significant news.

For more on ACA, check out the October 2017 article: Trump Announces 2 Changes to ACA 

Tags: , ,
Posted in ACA, Blog, Featured

Erin Maxwell

by Erin Maxwell


Author Bio:

As a compliance attorney for Paycom, Erin Maxwell monitors legal and regulatory changes at the state and federal level, focusing on health and employee benefits laws, to ensure the Paycom system is updated accordingly. She previously served as assistant general counsel at Asset Servicing Group in Oklahoma City. She holds a bachelor’s degree from the University of Central Oklahoma and a J.D. from the University of Oklahoma. Outside of work, Maxwell enjoys politics, historical mysteries and spending time with her family.

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