ACA Road to Repeal: Compliance in a Shifting Regulatory Landscape

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Business leaders have spent the last several years implementing procedures to ensure ACA compliance, and they are unsurprisingly now wondering whether those rules will change under the Trump Administration and the new Congress. But for the time being, it's essential to understand that nothing has changed. There are imminent deadlines for 2016 ACA form informational reporting and distribution, and all affected companies need to continue moving forward with 2017 ACA compliance under the existing guidelines and deadlines.

The compliance process will not be altered until new legislation is signed into law, or new regulations are promulgated after President Trump's nominees are confirmed by the Senate. President Trump's executive order to minimize the economic burden of the ACA was written with regulatory changes in mind, but the extent to which such changes could apply to employer responsibilities under the ACA is still unclear.

Here's what you need to keep in mind in terms of ACA compliance in the first quarter of 2017:

Filing 2016 Forms with the IRS

The clock is ticking on ACA informational reporting for tax year 2016. Many employers have already distributed 2016 ACA forms to employees, opting to streamline the process by including Form 1095-C with Form W-2. But employers who haven't yet distributed 2016 ACA forms still have time to do so, thanks to a one-time extension issued in November 2016, according to the IRS.

Employers must distribute Forms 1095-C (or Form 1095-B, if applicable) to employees by March 2, 2017 (the original deadline was January 31). The informational returns, Form 1094-C and corresponding Forms 1095-C, must be filed with the IRS by March 31, 2017, if filed electronically, or Feb. 28, 2017, if filing paper forms.

IRS Notices for Possible 2015 Non-filing

If your organization didn't comply with the reporting obligations associated with the employer mandate in 2015 (i.e., IRS Forms 1094-C/1095-C), expect to receive an IRS non-filing notice soon, if you have not already received one. The notification will give your organization a chance to respond before a non-filing penalty is assessed. If your organization was required to file these forms for 2015 but did not comply, you should file them as soon as possible, while also ensuring that the 2016 forms are filed by the upcoming deadline.

It's important to keep in mind the high cost of non-compliance:

Cost of ACA Compliance Failure is High

Continue to Compile Data and Stay in Compliance

Your organization will also need to remain in compliance with ACA Section 1557, which prohibits discrimination in health plans. Remember, too, to continue to track hours of service and ensure that the coverage you're offering full-time employees in 2017 provides minimum value and is considered affordable (the safe harbors are the same as prior years, but the affordability percentage has increased to 9.69 percent, according to the IRS.)

For the time being, continue to track and consolidate all the same information you've been gathering since 2015, so you can accurately complete ACA informational reporting for 2017. That reporting may or may not be required a year from now, but employers must continue to act within the existing guidelines.

Marketplace Notices

Marketplace notices are mailed to employers if their employees purchase subsidized coverage in the exchange. Section 1411 of the ACA requires this notification, so marketplace notices can't be eliminated without legislation. But the specifics of how the notices are generated and appealed are part of subsequent regulations. Although those regulations could change under President Trump's administration, organizations need to continue to have a plan in place to address current marketplace notices.

Just the Beginning

So far, the only new legislation that has passed is S.Con.Res.3, the non-binding budget resolution that directed congressional committees to begin drafting reconciliation legislation to repeal spending-related aspects of the ACA. But the prospect of Congress repealing the ACA's penalties in the very near future appears to be becoming less likely, as more senators express doubts over the idea of repealing ACA revenue streams, and possibly throwing insurance markets into disarray, without a clear replacement on the table.

Congress has not yet coalesced around a replacement proposal, although most of the proposals tend to focus on HSAs, selling health insurance across state lines, eliminating the ACA's mandates and possibly changing the current tax exclusion for employer-sponsored health insurance premiums. There's also a possibility that more control could be handed over to state governments, which could add additional complications for organizations with operations in multiple states.

The ramifications for ACA compliance will become more clear as time goes by, but nothing has changed yet, so continue to comply with existing ACA regulations.

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Other articles in this series:

ACA Road to Repeal: What Does Repeal and Replace Really Mean?

ACA Road to Repeal: Executive Order

ACA Road to Repeal: If the ACA Is on Its Way Out, What Comes Next?

ACA Road to Repeal: A State-Based Approach to ACA Replacement