Yesterday, Congress passed tax legislation, that among many other things, included a repeal of the individual shared responsibility penalties beginning in 2019. So, what does this mean for the employer mandate? Well, it’s still on the books. Even though the individual mandate has been effectively repealed, individuals can still qualify for subsidized Exchange coverage, which is what triggers employer shared responsibility penalties for Applicable Large Employers (ALEs) who have not offered coverage in compliance with IRS regulations. In other words, ALEs should still be tracking and monitoring hours of service so that they can satisfy their Form 1094/1095-C reporting requirements and avoid exposure to employer shared responsibility penalties.
Even with the employer mandate remaining in place, employers could experience other changes due to the individual mandate repeal. For example, for self-insured employers, reporting the individuals who are enrolled in coverage may no longer be required beginning with the 2019 tax year (i.e., Part III of Form 1095-C for ALEs and Forms 1094/1095-B for small employers). Additionally, preventive only plans, sometimes referred to as “Minimum Essential Coverage (MEC) plans” or “skinny plans” may have a reduced role in employee benefits if individuals are no longer subject to individual share responsibility penalties. Finally, we may not be operating with a full picture, as it is possible Congress could revisit repealing and replacing ACA next year.