Senate Tax Reform Bill Maintains Employer Mandate and Reporting Requirements

Gerry Nelligan
December 4, 2017

The tax reform bill that just passed the Senate does not eliminate the employer mandate to provide health insurance, nor does it change Affordable Care Act reporting requirements for eligible organizations.

The bill does eliminate the individual mandate to purchase health insurance, meaning individuals who choose not to buy insurance will no longer be subject to a fine. Although the corresponding tax-reform bill previously passed in the House did not eliminate the individual mandate, the reconciliation bill the House and Senate will now create likely will. President Trump is likely to sign into law any bill sent to him by a Republican- controlled Congress.

 Compliance Requirements Remain

However, neither the House nor the Senate bill makes any changes to the ACA employer mandate, meaning eligible companies—generally, those with at least 50 full-time employees—will still be required to provide health insurance to employees. They will also have to continue to send ACA forms 1094 and 1095 B and C to recipients and file those forms with the IRS.

From a tax-reporting perspective, then, the ACA is still very much in effect and unchanged. In fact, for Tax Year 2017, the IRS is enforcing tight deadlines and levying steep penalties for late and incorrect filings.

The IRS’s enforcement action represents the end of the “best faith” reporting requirements that made penalty abatements easy for organizations that could demonstrate that they were doing their best to stay compliant with ACA reporting. Simply making an effort is no longer enough. ACA deadlines and penalties are now in full effect and will continue to be regardless of the passage of a tax-reform bill. 

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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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