IRS Confirms ACA Mandate Penalties Still in Effect

Dropping a quick update to clarify some recent confusion regarding the state of Affordable Care Act (ACA) Employer and Individual Mandate penalties.

On January 20, 2017, President Trump signed an executive order intended to “minimize the unwarranted economic burden and regulatory burdens” of the ACA until the law can be repealed and replaced.

While the executive order directed the Department of Health and Human Services and other federal agencies to waive, delay or grant exemptions from ACA requirements that imposed a financial burden, it does not change any existing regulations.

The IRS issued information letters confirming that Individual and Employer Mandate penalties were still effective (see letters 2017-0010 and 2017-0013 on the employer mandate and 2017-0017 on the individual mandate). Until congress changes the law, taxpayers are still subject to reporting requirements and associated penalties.

In short, Employer Share Responsibility penalties are still in effective for Applicable Large Employers (ALEs) that fail to offer full-time employees affordable coverage that provides minimum value.

The Individual Mandate penalties continue to apply to those individuals who do not obtain acceptable health coverage.