Don't HR Alone #12 - ACA/AHCA Updates
Reporting requirements here to stay under AHCA, although perhaps will become simpler, expert says
The American Health Care Act (AHCA) (H.R. 1628) passed the House by a narrow margin on May 4, 2017. While the bill would not repeal the Patient Protection and Affordable Care Act’s (ACA) employer mandate, it would reduce the employer shared responsibility penalties to zero, retroactively effective to 2016. During a recent Aon webinar, A Closer Look: Health Care Reform in the First 100 Days of the Trump Administration, Kerri Willis, senior vice president of Aon Health & Benefits Legal Consulting Group, noted that while the employer mandate penalties would be eliminated, “the AHCA does not repeal the employer reporting requirements.”
Tax credits, not subsidies. The reason why the employer reporting requirements would not be removed under the AHCA is because instead of the ACA-created tax subsidies to purchase coverage, the AHCA would provide tax credits. The AHCA modifies and then repeals the Code Sec. 36B premium assistance tax credit, and creates an advanceable, refundable tax credit for individuals to purchase state-approved, major medical health insurance and unsubsidized COBRA coverage. Eligible individuals must not have access to government health insurance programs or an offer of health insurance from any employer. The credits would be adjusted by age and range from $2,000 for those younger than 30 years old to $4,000 for those age 60 or older.
“One thing to keep in mind about these tax credits is that they are only available to individuals who are not eligible for other coverage, such as coverage through an employer-based plan,” said Willis. “This is one of the reasons why employer reporting requirements do not go away. Since individuals are only eligible for these tax credits if they don’t have an offer of coverage from their employer, the IRS needs a way to know who has been offered coverage through their employer and who hasn’t. So there is going to have to be some sort of reporting from employers to the IRS to let them know who is eligible for these tax credits.”
Simplified reporting. The ACA requirements for employer reporting are complex. “The expectation would be that the reporting would get much simpler