Compliance with the Affordable Care Act (ACA) should still be a major concern for employers. Despite changes to the law since the new administration took office, employers are not finding compliance any easier. If anything, said changes have introduced a bit of confusion. Elimination of the individual mandate is just one example.
Dallas-based BenefitMall says that ACA compliance is more important now than ever before. As the current administration seeks to eliminate the law entirely through a few key court decisions, employers cannot let their guards down. They must continue maintaining compliance until such time as the ACA is either repealed or struck down in its entirety by the courts.
Much of the current confusion surrounding ACA compliance is directly related to the zero-dollar tax implemented by the GOP’s 2017 tax bill. This tax, because it relates to the individual mandate, is now at the core of the question of whether or not the ACA will ultimately survive.
About the Zero-Dollar Tax
It is often stated by media outlets that the ACA’s individual mandate has been eliminated. While that may be true for practical purposes, it is not true under the law. The individual mandate still exists as part of the ACA. It was effectively nullified by the 2017 tax bill through new language that reduced the penalty for not having healthcare insurance to zero.
In other words, the ACA still compels workers to have qualifying health insurance. But failure to purchase health insurance carries no penalty. That means the mandate is unenforceable. And according to a federal district court judge in Texas, that is enough to nullify the entire ACA.
In the 2012 Supreme Court decision that upheld the constitutionality of the ACA, the court determined that the penalty for not purchasing qualifying health insurance amounted to a tax and was, therefore, within the purview of the U.S. Congress. However, the court also ruled that the ACA is not constitutional based on the federal government’s legal right to regulate interstate commerce.
In making its ruling, the Supreme Court effectively made the individual mandate inseverable from the rest of the law. So if the ACA rests on the individual mandate penalty being a tax, eliminating the tax then prohibits the federal government from forcing individuals to buy health insurance.
Where It Leaves Us Today
The Trump administration refused to defend the ACA in the 2016 lawsuit decided in Texas. In fact, the Department of Justice declined to get involved in any way at that time. Things have since changed. The DOJ has now asked the federal court to affirm the 2016 decision and thereby nullify the ACA in its entirety.
Where does that leave us today? According to BenefitMall, it leaves us with nothing more to do than watch and wait. For the time being, the ACA remains in full force in all of its provisions with the exception of the individual mandate.
Employers are still required by law to offer their employees a qualifying health insurance plan. Employees can choose not to purchase that insurance and face no penalty for doing so. They can also purchase insurance on a federal exchange if affordable health insurance is not available through their employers.
Along with offering qualifying health insurance, employers must also file the appropriate paperwork with the IRS. Due dates for that paperwork have not changed.
Should the courts eventually strike down the ACA, there will be one less burden for payroll departments to worry about. But until that time comes, compliance is still not voluntary. Employers must continue to do what they have been doing since 2014.