Donald Trump claims he's gotten rid of the Affordable Care Act. The New York Times reports that Trump was assuring supporters at a Michigan rally last week that the ACA had been abolished. Someone might want to send a transcript of that speech to the IRS, though.
The IRS has been sending penalty notices to more than 30,000 businesses nationwide, advising them that lack of coverage availability will bring some pretty stiff fines. According to the employer mandate, companies with more than 50 full-time employees are obliged to provide health benefits to eligible employees or face penalties of more than $2,000 per worker. An estimate from the Congressional Budget Office predicts such fines could total $12 billion in 2018.
While the individual mandate requiring people to buy health coverage or pay a penalty is gone the employer mandate is not, and that's what the IRS is acting upon. Employers are still bound to provide coverage to employees or pay a penalty—and the IRS gets to collect if they fail to do so. Ironically, says the report, “the Trump administration is even enforcing some … [ACA] provisions more aggressively than President Barack Obama did—a reality that has enraged business groups and Republicans in Congress who still want the law officially repealed.”
Business groups want the provision repealed, as do Republicans. Many decry the IRS's failure to follow its own procedures to collect the fines, including warning employers that they're in violation. And many companies are crying foul because of what they say are errors in filing out the forms to indicate whether coverage was provided.
The price tag for the penalties has the potential to be huge, depending on which way the courts jump on the IRS's position. While the employer mandate was supposed to take effect in 2014, delays in reporting and in the Treasury Department clarifying the requirements meant that the IRS is just now notifying employers of penalties based on the 2015 tax year. Penalty notifications for 2016 and 2017 are expected to come soon.
From: BenefitsPro
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
