In spite of the recent efforts by Con­gress to change or repeal the ACA, its pro­vi­sions are still in effect. The IRS has issued con­tin­u­ing guid­ance on the afford­abil­i­ty rate for cov­er­age, the employ­er shared respon­si­bil­i­ty pro­vi­sions and report­ing, and the indi­vid­ual man­date provision.

IRS Released the 2018 Afford­abil­i­ty Rate

The Inter­nal Rev­enue Ser­vice released its Rev­enue Pro­ce­dure 2017–36, which sets the afford­abil­i­ty per­cent­age at 9.56 per­cent for 2018. Under the Patient Pro­tec­tion and Afford­able Care Act (ACA), an applic­a­ble large employ­er may be liable for a penal­ty if a full-time employ­ee’s share of pre­mi­um for the low­est cost self-only option offered by the employ­er is not afford­able (for 2018, if it’s more than 9.56 per­cent of the employ­ee’s house­hold income) and the employ­ee gets a pre­mi­um tax cred­it for Mar­ket­place coverage.

Because the 2018 afford­abil­i­ty rate is low­er than the 2017 afford­abil­i­ty rate, applic­a­ble large employ­ers may need to reduce their employ­ees’ share of pre­mi­um con­tri­bu­tions to main­tain afford­able cov­er­age. Employ­ers should dou­ble check their antic­i­pat­ed 2018 pre­mi­ums now to pre­vent the need for mid-year changes.

IRS Releas­es Infor­ma­tion Letters

The IRS issued Infor­ma­tion Let­ters 2017–0010, 2017–0011, 2017–0013, and 2017–0017 on the ACA’s employ­er shared respon­si­bil­i­ty pro­vi­sions and indi­vid­ual mandate.

IRS Infor­ma­tion Let­ters 2017–0010 and 2017–0013 explain that the ACA’s employ­er shared respon­si­bil­i­ty pro­vi­sions con­tin­ue to apply. The let­ters state, “The [Pres­i­den­t’s Jan­u­ary 20, 2017] Exec­u­tive Order does not change the law; the leg­isla­tive pro­vi­sions of the ACA are still in force until changed by the Con­gress, and tax­pay­ers remain required to fol­low the law and pay what they may owe.” Fur­ther, the let­ters indi­cate that there are no waivers from poten­tial penal­ties for fail­ing to offer health cov­er­age to full-time employ­ees and their dependents.

IRS Infor­ma­tion Let­ters 2017–0011 and 2017–0017 address the con­tin­ued appli­ca­tion of the ACA’s indi­vid­ual shared respon­si­bil­i­ty pro­vi­sions. Let­ter 2017–0017 states, “The Exec­u­tive Order does not change the law; the leg­isla­tive pro­vi­sions of the ACA are still in force until changed by the Con­gress, and tax­pay­ers remain required to fol­low the law, includ­ing the require­ment to have min­i­mum essen­tial cov­er­age for each month, qual­i­fy for a cov­er­age exemp­tion for the month, or make a shared respon­si­bil­i­ty payment.”

IRS Issues Draft Forms 1094/1095

The IRS issued draft Forms 1094‑B, 1095‑B, 1094‑C, and 1095‑C for the 2017 tax year. Cov­er­age providers use Forms 1094‑B and 1095‑B to report health plan enroll­ment. Applic­a­ble large employ­ers use Forms 1094‑C and 1095‑C to report infor­ma­tion relat­ed to their employ­er shared respon­si­bil­i­ty pro­vi­sions under the ACA.

There are no changes to the face of draft Forms 1094‑B, 1095‑B, or 1095‑C. The IRS made one sub­stan­tive change to draft Form 1094‑C. The IRS removed the line 22 box “Sec­tion 4980H Tran­si­tion Relief” which was applic­a­ble to the 2015 plan year only.

By Danielle Capilla

Orig­i­nal­ly post­ed  by www.UBABenefits.com