How does the repeal of the ACA's individual mandate impact employer group health plans and employer obligations under the ACA's employer mandate and reporting requirements?

As a reminder, the ACA’s individual mandate was repealed as part of the 2017 tax reform bill. However, the individual mandate repeal doesn’t take effect until 2019. Therefore, the individual mandate remains in effect for 2018, meaning generally that all U.S. citizens must have health insurance coverage or risk a tax penalty. Beginning in 2019, though, individuals may forego health insurance without risking that tax penalty.

Keep in mind, though, the individual mandate repeal doesn’t impact an employer’s obligation to offer affordable coverage to all full-time employees (and their dependents) under the ACA’s employer mandate. Similarly, the repeal doesn’t impact an employer’s obligation to report to the IRS (and provide forms to employees) under IRC Sections 6055 and 6056 (relating to IRS Forms 1094/95-B and 1094/95-C). So, employers must continue to comply with the employer mandate and reporting requirements (unless Congress makes broader changes in the future).

That said, there are a few bills to watch in Congress in 2018 regarding smaller changes to the employer mandate and reporting. On the employer mandate, a bill has been introduced that would change the definition of “full-time employees” to those that work 40 hours per week (as opposed to the 30 hours per week under current employer mandate rules). On reporting, a bill has been introduced that greatly simplifies and streamlines employer reporting requirements. Nevertheless, both obligations remain in place for now, and employers should continue their compliance efforts to comply with both.

In the meantime, there’s debate on how the individual mandate repeal might impact employer group health plan participation. On the one hand, elimination of the individual mandate penalty tax could reduce enrollment in employer plans if participants opt out (i.e., decide they don’t want or need coverage). On the other hand, the repeal could result in a rise in premium costs in the individual market (as healthy individuals drop coverage), which could increase enrollment in employer plans.

Although it remains to be seen how this will all play out, employers should ensure that they comply with the law as it is currently. For now, that includes continuing to comply with the employer mandate and reporting requirements.