"Obamacare is the law of the land.... We're going to be living with Obamacare for the foreseeable future." - Representative Paul Ryan, Speaker of the House, March 24, 2017

On March 24, 2017, Speaker of the House Paul Ryan pulled the American Health Care Act from consideration by the House of Representatives, which means the Affordable Care Act (ACA) remains the law of the land. For employers, this means all ACA requirements related to the employer shared responsibility mandate, reporting, and taxes remain in effect and enforceable by the Internal Revenue Service (IRS).

ACA Replacement Bill Considered and Then Pulled
On March 6, House Republicans introduced the American Health Care Act (AHCA). The AHCA was the product of January's budget resolution (S.Con.Res.3) for the federal government's 2017 fiscal year directing Congressional committees to draft budget reconciliation legislation to repeal certain tax and spending provisions of the ACA. Although the AHCA progressed during the past few weeks through several House committees, including Ways and Means, Energy and Commerce, Budget, and Rules, on Friday, March 24 2017, it became apparent to House leadership and the administration that the bill did not have enough votes to be passed. Faced with probable defeat, Speaker Ryan decided the bill should not be voted on by House members.

Next Steps for Health Care Reform
It appears unlikely that the AHCA or any alternative repeal and replace legislation will be considered by the House this year, based on comments from Speaker Ryan and the White House. All indications are that Republicans will shift their focus to comprehensive tax reform legislation. Employers must continue to comply with ACA mandates.

Does It Change or Not Change...That is the Question
The ACA remains the law of the land, and at this point does not appear likely that Congress will be able to enact comprehensive legislation to repeal and overhaul the ACA this year. Congressional leaders now plan to turn their attention to drafting and adopting a budget resolution for the federal government's 2018 fiscal year sometime in May or June. The new budget resolution will likely include new budget reconciliation instructions to the House Ways and Means and Senate Finance Committees instructing them to draft comprehensive tax reform legislation. Doing so would foreclose the opportunity for Congress to pass comprehensive ACA repeal and replace legislation with budget reconciliation protection under the 2017 budget resolution. As a reminder, the reconciliation process in Congress makes it easier to pass a bill by, among other things, requiring the Senate to have only a simple majority (51) voting in favor of a bill vs. the normal requirement of 60 votes.

Continued ACA regulatory action is also expected. For example, Secretary of Health and Human Services (HHS) Tom Price recently invited governors to apply to HHS for State Innovation Waivers that would allow them to have greater flexibility to structure the provision of health care in their state. Another key issue to be on the lookout for will be whether and to what extent the Administration takes steps to stabilize the individual insurance markets, including through the appropriation of funds to pay for cost sharing subsidies. Employers also should expect to continue to receive notices from the federal and state Exchanges, with the federal notices expected to be issued this spring.

When it comes to penalties, here's what employers can expect to see:

Cost of ACA Compliance Failure

The employer "shared responsibility" mandate and related employer reporting requirements have not been amended and remain in place. These requirements are enforced by the IRS. The IRS is expected to send out employer shared responsibility penalty notices shortly based on 2015 filings. The IRS already has sent out notices to large employers who did not file any ACA forms in 2015. For employers, this means all ACA requirements and potential penalties related to the employer mandate and reporting rules remain in effect for 2015, 2016, and beyond.

Tags: aca Tax Compliance healthcare