Since 2014, when the individual responsibility mandate to have health coverage became effective, the Form 1040 has asked taxpayers to check a box if they had a full-year of coverage. If a taxpayer could not check that box, then either (1) Form 8965 was required to claim an exemption from the mandate or (2) a penalty payment was calculated.

The IRS recently issued a statement that it will not automatically reject 2016 returns as planned if taxpayers do not follow the instructions for either indicating coverage, claiming the exemption, or paying the penalty. According to the statement, the IRS is reviewing the new administration’s recent executive order that allowed federal agencies “to exercise authority and discretion available to them to reduce potential burden” with regard to the ACA.

The ACA’s individual responsibility mandate to have health coverage or pay a penalty still remains in effect. In addition, insurance carriers and employers with self-insured medical plans are still required to report medical coverage, by month and by family member, on the Forms 1095.

We realize there is much uncertainty surrounding the future of the ACA. Keller will continue to provide compliance advice based on the law and regulations now in effect, and will update our clients as rules and responsibilities change. If you have questions, please contact your Keller account team.