How the Latest ACA Ruling Impacts Employers

By C. Christopher Parto
 
The 5th U.S. Circuit Court of Appeals ruled that the Affordable Care Act’s (ACA) individual mandate was unconstitutional on December 18, 2019, leaving employers and employees feeling a little uncertain and confused about what they needed to do to remain compliant, as well as what would happen next.  
 
Some of the questions that arose included:
  • Is this the start of a complete overturning of the ACA?
  • Are health insurance plans going to get more expensive for employers?
  • Can individuals still buy health insurance through the marketplace, and will they still qualify for credits or potentially face penalties?
Here’s what employers need to know about maintaining compliance with the ACA.
 
At this point, employers shouldn’t alter what they are currently doing when it comes to ACA compliance.  They need to furnish the required forms and meet all the deadlines as outlined by the federal government.
 
Essentially, the ruling impacts individuals far more than it impacts employers.  The individual mandate that was overturned was a small component of the entire ACA that issued penalties against individuals who didn’t maintain health coverage.
 
In 2017, a bill was brought forth that eliminated the tax penalty for those who didn’t comply with the mandate.  As a result, the ACA no longer had any legal ability to impose a tax penalty, since Congress no longer had the power to enforce it.  The individual mandate couldn’t stand on its own, which caused it to go to the 5th U.S. Circuit Court of Appeals where the overturning happened.
 
Changes could still be forthcoming to the employer side of the ACA, but for now, continue with business as usual and provide all required documentation unless told otherwise.
 
How the ACA impacts employer-based plans
The ACA is still in effect, minus the individual mandate, so make sure your organization is following the requirements put onto employers:
  • Provide Form 1095 to each employee by the deadline;
  • File Forms 1094 and 1095 with the IRS by the deadline;
  • Offer health insurance to employees and their dependents (if your business qualifies as an Applicable Large Employer).
It is unlikely that any major court rulings on the ACA will occur prior to the 2020 presidential election.  
 
iSolved provides payroll, HR, time tracking and benefits, unified in one solution for a better user experience.  For more information, please contact C. Christopher Parto, HCM Strategic Account Sales Consultant, at [email protected].
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