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August 14, 2017
Despite all the furor in Washington DC over the Affordable Care Act (ACA), the law is still on the books and enforceable. So, employers need to continue to monitor the ACA requirements and to comply with the ACA, including the continued reporting requirements for 2017. Here are a few recent reminders.
Applicable Large Employer (ALEs) Reporting Obligation Continues For 2017 - At the end of July, the IRS issued draft ACA reporting forms for 2017: Forms 1094-B, 1095-B, 1094-C and 1095-C. These can be found at the IRS draft forms site (click here). Final forms should be issued soon.
Employer Penalties Still Apply - The IRS has recently released a number of advisory letters issued by the Office of Chief Counsel confirming aspects of the ACA raised by individuals and members of the House of Representatives on behalf of constituents. Two letters confirmed that employers continue to be liable for the Employer Shared Responsibility Payments (ESRP), which are due if the employer fails to offer affordable minimum essential coverage to substantially all full-time employees and that no waiver of these payments applies to employers who are a nonprofit or have financial difficulties.
Individual Penalties Still Apply - The IRS also affirmed that the individual mandate payment owed by individuals who do not have minimum essential coverage continues to apply for 2017 ($695 per adult, $347.50 per child, family maximum of $2,085). For individuals who do not have employer health coverage, the open enrollment at HealthCare.gov for 2018 coverage will be November 1, 2017 – December 15, 2017.
Executive Order Did Not Change the ACA Laws - The IRS has specifically stated that the Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal (issued January 20, 2017) permits federal agencies to exercise authority to reduce potential burdens of ACA. But, the IRS went on to say: “The Executive Order does not change the law; the legislative provisions of the ACA are still in force…”
A special reminder to employers involved in or contemplating acquisitions or divestitures: be sure that the employee data needed for the 2017 reports due in 2018, as well as records (e.g., new hire determinations, look-back period calculations) to support identification of employees who are not considered “full-time” for ACA purposes, is obtained. The ACA includes successor employer rules that could impose liability on an acquirer, even in an asset acquisition.
Employers changing payroll providers should also ensure that the full year’s data will continue to be available for employer reporting under the ACA.
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.