Senate Drafts ACA Replacement Bill, Does Not Repeal Employer Reporting

Tom Hospod
June 23, 2017

This blog was last updated on June 26, 2021

Senate leadership released a discussion draft of the Better Care Reconciliation Act of 2017 – its version of the House’s American Health Care Act (AHCA) intended to repeal and replace the Affordable Care Act.

Although this legislation would nullify penalties for the individual and employer mandates, it would not repeal IRS reporting obligations under IRC §§ 6055 and 6056 or nullify penalties under IRC §§ 6721 and 6722.

The Senate bill maintains the premium tax credits that would be available to certain individuals who purchase their own insurance plans. Individuals are only eligible for these tax credits if they are not offered employer coverage – as such, the IRS will maintain employer information reporting as a means of administering these tax credits. The health insurance coverage credits would similarly depend on information provided by employers to their employees and to the IRS. Additionally, although not expressly addressed, this legislation does not appear to repeal the requirement for employers to report minimum essential coverage offers.

While reporting requirements may be simplified to a degree, pursuant to executive action, there are no definitive plans from the IRS to take any such action. Examples of simplification may include removing certain fields on Form 1095 that are specifically designed for enforcement of the employer mandate. The IRS will also have the option, as contemplated under the House bill, to eventually incorporate healthcare coverage reporting into Form W-2. However, for the time being, Applicable Large Employers will still be under an obligation to file Forms 1094-C, 1095-B, and/or 1095-C annually.

As mentioned above, this is merely a draft of the Senate bill. It is likely to change in order to placate Republican Senators who have indicated they would vote against the bill. The CBO is expected to release its report on the bill’s fiscal impact early next week, which will likely induce further modifications. Senate Majority Leader Mitch McConnell is aiming for a vote on June 29^th^. He has invoked a procedural rule which will allow the bill to bypass the committee process. If the measure is brought to a vote and passes, it will then go to a joint conference committee in order to reconcile the differences between the House and Senate bills. If the bill does not pass the Senate, it will likely undergo further revisions and redrafting.

You can read more about this bill’s general substantive provisions here.

Additional Sources

Health Affairs Blog

Society of Human Resource Management

Washington Post

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Tom Hospod

Tom Hospod is a Regulatory Counsel at Sovos Compliance. Within Sovos’ Regulatory Analysis function, Tom focuses om Affordable Care Act (ACA) reporting, Tax Withholding, and Automatic Exchange of Information (AEOI). Prior to Sovos, Tom worked as a legislative aide in the Massachusetts House of Representatives. Tom is a member of the Massachusetts Bar, earned his B.A. from Boston College and his J.D. from the University of Miami.
Share this post

dtc spirits new york
North America ShipCompliant
February 14, 2025
A New Era for DtC Spirits Shipping: How New York’s Market is Taking Shape

This blog was last updated on February 14, 2025 In the fall of 2024, New York became the latest state to open its doors to direct-to-consumer (DtC) spirits shipping, marking a significant milestone for the industry. As one of the most populous states with a thriving market for craft and high-end spirits, the shift was […]

North America Unclaimed Property
February 10, 2025
Delaware Announces 2025 VDA Invitation Dates

This blog was last updated on February 14, 2025 Mark your calendars – April 11, 2025 and August 15, 2025 are this year’s anticipated release dates for the Delaware’s Secretary of State (SOS) VDA program invitations. In the event that an organization receives an invitation to participate in the Voluntary Disclosure Agreement (VDA) program  , […]

North America Sales & Use Tax
February 6, 2025
The Tariff and Sales Tax Mishmash – Untying the Mess

This blog was last updated on February 14, 2025 Talk of tariffs dominates the current news cycle with some commentators suggesting that tariffs will spell disaster for our economy while others say the exact opposite. We’ve seen the stock market sometimes fluctuate as tariffs are announced but later suspended, leaving us to wonder whether an […]

retailer dtc wine shipping
North America ShipCompliant
February 6, 2025
Retailer DtC Wine Shipping: The Time Has Come

This blog was last updated on February 14, 2025 By Tom Wark, Executive Director, National Association of Wine Retailers We are often reminded by the media and those in the wine industry—as well as by wine enthusiasts—that the three-tier system of alcohol distribution in most states hinders consumer access to the expansive number of wines […]

Montana 1099-DA
North America Tax Information Reporting
February 5, 2025
State Filing Alert: Montana’s New 1099-DA Requirements for Crypto Brokers

This blog was last updated on February 5, 2025 Reporting digital asset transactions on Form 1099-DA just got a little more complicated. For 2025 transactions, crypto brokers that file Form 1099-DA with the IRS will be required to file the 1099-DA with the State of Montana. This makes Montana the first state to introduce a […]