Health Care Mandates and Tax Reform: What’s Really Going On?

November 17, 2017

Category: Compliance

ACA - Statue of Liberty

After this summer’s failure to repeal and replace the Affordable Care Act, Congress has been largely silent on healthcare strategy while turning the focus to tax reform. Though President Trump’s first executive order upon taking office instructed government agencies to take a hands-off approach to ACA enforcement, there has been no change in the healthcare law, the requirement that individuals pay a tax if they fail to obtain qualifying coverage, or the requirement that companies of 50 or more employees provide qualifying offers of coverage. So this week’s news that repealing the individual mandate will be added to the GOP’s tax reform proposal could mean major changes to the way healthcare coverage is regulated.

Is the Individual Mandate being enforced now or not?

Yes. For the first time, the IRS will reject individual tax returns that do not include information on a filer’s compliance with the ACA requirement that individuals obtain and maintain coverage.

What about the Employer Mandate, is it being enforced too?

Yes. The IRS has begun sending out notices to employers it has determined owe penalties under the ACA. While there had been debate about whether enforcement and collection would happen after the executive order, the IRS determined that it is still required to enforce the ACA at this time.

How does tax reform fit in?

Along with healthcare reform, tax reform has been the other main focus of the Republican-led Congress in 2017. Over the past week, the Senate decided to include repeal of the requirement that individuals purchase insurance in the latest tax efforts. Whether this latest push passes remains an open question — the House and Senate bills look quite different and some moderate senators have expressed their doubts.  

The focus for Republicans has been on lowering costs and expanding choice. But the CBO has cast doubt that repealing the individual mandate would do that.

Whatever the result, the employer requirement would not be repealed by this effort.

What now?

The latest proposal has passed the House, but now debate shifts to the Senate. It remains to be seen whether these or other healthcare changes will be included in the final bill.

With the IRS’ latest moves to enforce both the individual and employer requirements, complying with the ACA remains a must for individuals and businesses alike. As tax season approaches, the Zenefits ACA tool remains the best way to organize your information and prepare for e-filing.  Keep an eye on the Zenefits blog for updates as the tax and healthcare reform discussions continue in Congress.


Jordan Mazur is Legal Counsel at Zenefits. As the son of healthcare professionals and small business owners, he is committed to connecting small businesses and their employees with healthcare benefits and HR tools to make their work and lives easier. He is an avid runner and serves as sous-chef to his three-year-old daughter in her culinary experiments.

Category: Compliance

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