January 19, 2017
Tomorrow, January 20, 2017, President Trump will officially take office. This has led many to speculate on the immediate demise of the Affordable Care Act (ACA). While changes to the ACA are assuredly coming, these changes are unlikely to impact the 2016 ACA reporting requirements. The deadline for employers to furnish the Form 1095-C employee statements is March 2, 2017. If an employer has not already begun the process of completing a Form 1095-C for its applicable employees, there is not much time left to accurately complete lines 14, 15, and 16, print and address the Forms, and place the Forms in the mail. Predictably, some employers are waiting to see what happens in the opening weeks of President Trump’s administration. This could place providers processing these employers’ Form 1095-Cs in an impossible position to meet the March 2, 2017 deadline and has only a minuscule chance of being beneficial to the employer.
Despite all of the chatter about the ACA being repealed, any changes or repeal will almost certainly not impact 2016 reporting and likely not impact 2017 and possibly 2018 reporting. The first reason the reporting rules are unlikely to change immediately is the 2016 premium tax credits have already been used by individuals to purchase health insurance through the Marketplace. These premium tax credits are funded in large part through the section 4980H penalty. The reporting rules were created to assist the government in determining which employers owe a section 4980H penalty. Therefore, logic, as well as the country’s ongoing deficit crisis, something Republicans have been quick to point out, would dictate the funding mechanism for the premium tax credits be collected as planned. That funding mechanism was originally projected by the CBO to be $21 billion, but more recent projections estimate the 2016 section 4980H penalties to exceed $30 billion. This is certainly not a small amount to leave on the table which is what Republicans would be doing if reporting was abandoned in 2016. Similarly, advanced premium tax credits have already assisted individuals purchase coverage through the Marketplace in 2017. Therefore, to cover the premium tax credits that have already been paid out in 2017, reporting may linger on for another year even if the ACA is repealed.
Further complicating any quick repeal effort is the fact that the 2017 plan year has begun for many individuals. Any major reform efforts completely repealing the ACA could cause midyear changes to plans already in place for individuals. This presents complicated challenges that could be avoided by waiting until a new calendar year for a new set of rules to take place. Additionally, a full repeal and replace of the ACA is likely to be fought by some giant players who restructured and made certain acquisitions in response to the ACA. A different set of health care rules moving forward could cost these giant players billions of dollars. Finally, any replacement legislation would need to have the support of at least eight Democrats to overcome a potential Democrat filibuster. While these points do not deal directly with reporting, each shows how complicated any repeal process is going to be in the months to come. The inevitable changes that are coming to the ACA are likely to occur well after the first hardline ACA reporting deadline for 2016 of March 2, 2017. Given all of these factors, full compliance with the 2016 reporting deadlines is the rational decision.
Admittedly, nobody knows exactly what will happen with the ACA moving forward, but reporting in 2016 is almost inevitably going to occur as scheduled. Any employer who has not begun the process of completing the Form 1095-C must start promptly in order to meet the fast-approaching deadlines. Please contact us if we can assist you in completing the Forms 1094-C and 1095-C.
About the author – Ryan Moulder serves as General Counsel at Accord Systems, LLC and is a Partner at Health Care Attorney's P.C. Ryan received his LL.M. from Georgetown University Law Center and his J.D. from Saint Louis University School of Law. He has distinguished himself as a leader in the newly created Affordable Care Act arena and has written and spoken on a variety of ACA topics as it relates to compliance for companies.
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