IRS Confirms ACA Mandate Penalties in Effect

August 21, 2017

Under ACA mandates, there are IRS penalties on individuals who do not have health coverage and on large employers who do not offer health coverage to full-time employees.

In January, the White House issued an Executive Order indicating that it intended a prompt repeal of the ACA, and directed the federal agencies to use their authority and discretion to reduce regulatory burdens imposed by the ACA.  This tax season, the IRS accepted personal income tax returns even if the taxpayer did not indicate that the household had health coverage. In addition, the IRS has yet to assess penalties against any employer for not offering affordable health coverage, as reported by large employers on Forms 1095 for the past two years. Congress spent the past few months attempting to repeal the individual and employer mandate penalties.

Given this climate, it has been uncertain if the ACA mandate penalties were going to be enforced by the IRS.  However, over the past few months, the IRS has responded to compliance queries from several businesses and individuals stating, “The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they owe.”

Keller continues to work with our clients to ensure compliance with the ACA.  If you have any questions regarding the employer mandate or other ACA regulations, please contact your Keller account team.