Will the Affordable Care Act be repealed?
President Obama vetoes ACA repeal legislation
TAX ALERT |
Update: On Jan. 8, 2016, President Obama vetoed the Affordable Care Act repeal legislation passed by Congress. Given that an override of the president’s veto is unlikely, employers should comply with the law as currently enacted.
On Jan. 6, 2016, Congress passed a bill that would repeal major portions of the Affordable Care Act (ACA). The Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015 (H.R. 3762) now goes to President Obama for signature. However, the White House has already issued a statement indicating that the administration is strongly opposed to the legislation and that the president will veto the bill.
In addition to other changes, the bill would eliminate the following:
- Employer shared responsibility payments that penalize employers who do not offer ACA-compliant coverage to all full-time employees. The penalty is intended to apply starting in 2015. However, this legislation would fully repeal the penalty so that it does not go into effect in 2015.
- Individual mandate penalties that are taxes on individuals who choose not to obtain health insurance. The penalties were first effective in 2014 and required individuals to pay an additional tax with their 2014 personal income tax return if they did not have health coverage or meet an exemption. Under this bill, the penalties would not apply for 2015 and future years.
- Premium tax credits that are government subsidies toward the premium cost of health insurance purchased by eligible individuals on the exchange/marketplace. This change would be effective in 2018.
Since Congress has indicated that it does not have enough votes to override a presidential veto, this act is not expected to become law. Therefore, employers should continue to comply with the Affordable Care Act as passed in 2010, including filing Forms 1095-C and 1094-C in 2016 to report to the IRS whether they offered employees ACA-compliant coverage in 2015.