What’s next for employers and ACA compliance

Print Friendly, PDF & Email
November 10, 2016
Updated November 18, 2016
By HELEN KARAKOUDAS, CHRS | Director, ACA Insights


While President-Elect Donald J. Trump was making his victory speech, we began picking the brains of people who understand the inner workings of Capitol Hill when it comes to health care policy.

We asked:

  • “When the rubber hits the road in Congress, how will President-Elect Donald Trump’s campaign pledge to ‘make Obamacare go away’ play out?”
  • “In the days, weeks and months of transition to a new administration, what would such an effort mean for employers’ Affordable Care Act responsibilities?”

At a high level, we hear:

  • “The ACA is not going away. It may change, but it’s not going away.”

Drilling down to the ACA employer mandate, we hear:

  • “Unpopular as it is, that may not entirely go away either.”


The reason behind both observations by legal scholars is familiar to all of us who have been working with employers struggling to make sense of one of the biggest compliance challenges to ever hit American businesses:

It’s complicated.

When you deconstruct the legislative and regulatory dance steps that created the federal mandate for employers of a certain size to offer health insurance to full-time employees or face an IRS penalty, it’s easier said than done to unring the bell.

Nixing the ACA employer mandate – or any part of a massive, interlaced law – can’t happen by executive action, nor by executive micromanagement of legislative action.

  • The U.S. Congress is a government body that takes its law-making responsibility very seriously.
  • Whoever is holding each seat in Congress, no matter what their party affiliation is, wants to actively craft what’s on their watch.


A history lesson that cannot be ignored

Respecting the law-crafting role of Congress is exactly how we got to an overhaul of the U.S. health care system under President Barack Obama and not under President Bill Clinton.

Obama had learned from Clinton’s strategic failure: Handing over your wishes in a bullet-pointed and fleshed-out legislative package and saying,

  • “Bless this, so I can bless it,” doesn’t work.

Members of Bill Clinton’s own party didn’t appreciate that tone and, as a result, didn’t follow through as nudged.

Seeing how all that had played out for his predecessor, the fired-up and newly inaugurated Obama instead said to Congress in early 2009:

  • “Here’s where I’d like to get. Y’all figure out the steps.” This worked.


Messy and time-consuming work

The effectiveness of such a strategy – getting out of the way so those whose job it is can do their work – cannot be ignored now.

House Speaker Paul Ryan, who may get caught in partisan pressure to seek a blessing of his own repeal-and-replace draft or another bullet-pointed and fleshed-out draft, needs to pay particular attention to this lesson from U.S. health care policy history.

  • Nuances in the public policy wired into the Affordable Care Act are numerous.
  • The bits and pieces of their interplay have to be sorted through.
  • One piece is seldom independent of another.

The way that it was messy and time-consuming for one party to put together the ACA employer mandate (the funding mechanism) and the ACA individual mandate (the carrot for insurers’ buy-in), it’s going to be messy and time-consuming for another party to dismantle these provisions in the law.


Takeaway for 1095 reporting obligations

Amid the current uncertainty, it seems likely that such an effort may take:

  • Longer than 7 business days after the inauguration, when 1095-C and 1095-B forms are due to employees (January 31, 2017). Please note that on November 18, 2016, the IRS extended the 1095-C and 1095-B distribution deadline to March 2, 2017; IRS notice link in tweet below.
  • Longer than 26 business days after the inauguration, when paper copies of 1095-C and 1095-B forms – along with their respective 1094-C and 1094-B forms – are due to the IRS (February 28, 2017).
  • Longer than 49 business days after the inauguration, when electronic copies of 1095-C and 1095-B forms – along with their respective 1094-C and 1094-B forms – are due to the IRS (March 31, 2017).
  • Longer than 60 business days after the inauguration, when individuals’ ACA taxes are due to the IRS and data crunching for employer ACA penalties for Tax Year 2016 is set to begin (April 17, 2017).
Helen Karakoudas

By Helen Karakoudas, CHRS

We are told that any chipping away of any part of the law – whatever that might be – would be finalized no sooner than 100 to 200 days after President-Elect Trump takes office.

Employers subject to the ACA’s coverage rules cannot lose sight of the reality that – until legislative and/or regulatory changes are, in fact, on record – the penalty risks of sitting on their hands and waiting for repeal of this part of the Affordable Care Act remain unchanged.

So, we are in for a long ride.


A version of this article first appeared on LinkedIn Pulse.


November 18, 2016 update:

No Comments Yet.

Leave a comment