ACA Update: What Does the Graham-Cassidy Plan Mean for Reporting?

Gerry Nelligan
September 20, 2017

The employer mandate could be repealed if Senate Republicans push through their newest attempt to repeal and replace the Affordable Care Act, but it appears as though ACA reporting requirements under IRC 6055 and 6056 would remain intact.

Republicans introduced the Graham-Cassidy Plan in recent weeks. The Senate has until September 30 to pass the bill, although no vote has been scheduled as of yet. A hearing is set to take place on September 25.


What would this bill do?

This proposed legislation is considered to be the most wide-reaching version of health care reform yet. The Graham-Cassidy Plan would repeal the individual and employer mandates and allocate money to state governments to create their own health care systems. However, it would keep the ACA reporting requirements under IRC 6055 and 6056 in effect.

Instead of federal funding for Medicaid and ACA subsidies, states would receive a lump sum of money to use in a variety of ways.

This makes the Graham-Cassidy Plan fundamentally different from previous versions of repeal-and-replace bills — which kept the ACA framework intact, while cutting certain provisions and altering others.


What does this mean for reporting?

Self-insuring employers would still need to provide information to the IRS for employees who enroll in company-provided health insurance plans, per the ACA reporting requirements detailed under IRC 6055 (Information Reporting for Health Coverage Providers) and 6056 (Reporting of Offers of Health Insurance Coverage by Employers).

The Graham-Cassidy plan would:

  1. Change the traditional Medicaid program into a per capita cap or block grant program.
  2. Enable states to allow insurers to vary premium rates based on health status, age or other considerations, or decline to offer the ACA’s “essential health benefits.”
  3. Expand states’ authority to request waivers (under section 1332 of the ACA) of the ACA’s insurance market requirement if they can demonstrate more effective approaches.
  4. Allow states to impose work requirements on Medicaid recipients.


What are the chances the bill passes?

As of now, the Graham-Cassidy Plan’s future is uncertain. While the bill has gained momentum and support among Senate Republicans since its introduction, it will fail if more than two Republican senators vote against it.

Sen. Rand Paul has already declared he will vote “no.” Sens. John McCain and Lisa Murkowski, who voted against the “skinny repeal” bill in July, have been critical of the Graham-Cassidy Plan. Neither senator has publicly declare support for or against the bill, however, so the legislation’s future is up in the air at the moment.


Further reading:

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As always, businesses should stay current with any potential changes to ACA legislation, as they could have impacts to reporting requirements ranging from minimal to severe. For updates as more details emerge, subscribe to the Sovos blog.

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Gerry Nelligan

Gerry Nelligan is a Regulatory Analysis Supervisor at Sovos, leading a team of counsels covering information reporting, including 10-Series IRS reporting, Affordable Care Act (ACA) reporting and Automatic Exchange of Information (AEOI). Gerry received his J.D. from Suffolk University Law School and his B.A. from Providence College. He is a licensed attorney in the state of Massachusetts.
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