Affordable Care Act individual and employer mandates remain in effect

September 6, 2017|Terri Lillesand

To date, the Affordable Care Act (ACA) remains the law and the IRS will not waive penalties for individual and employer mandates under the ACA.

While there has been continued discussion of health care reform and a possible repeal and replacement of the ACA, there has been no change to the current law. As a result, the ACA’s individual and employer mandates, as well as any related reporting requirements, are still the current law and must be followed.

Presidential Executive Order does not change the law

Several IRS information letters address the impact of the President’s Executive Order on January 20, 2017, that directs federal agencies to exercise the authority and discretion permitted by law to reduce the ACA burden. The Executive Order does not change the law; the ACA is still in force until changed by Congress, and the IRS is required by law to enforce tax law—including any applicable penalties.

The IRS released the information letters to clarify and respond to taxpayer questions, including several reminders:

  • Employer shared responsibility penalties continue to apply for applicable large employers that fail to offer affordable health care coverage to their full-time employees (and dependents). As a reminder, no waivers are available under the law, including for financial or religious reasons.
  • Individual mandate penalties continue to apply for individuals who do not obtain acceptable health care coverage (if they do not qualify for an exemption). According to the IRS information letters, individuals who go without health coverage, but don’t qualify for an ACA coverage exemption should make an individual mandate penalty payment when filing their 2017 personal tax return.

In addition, IRS frequently asked questions (55-58) indicate that, in late 2017, the IRS is planning to contact those employers that filed Form 1095 for 2015 regarding any potential liability for an employer penalty.

2017 draft forms and instructions released

The IRS released draft 2017 Forms 1094 and 1095 and instructions to use for your employer reporting requirements. The draft forms are essentially the same as those used in 2016, with just a few minor changes. There could be changes to the draft forms before the final 2017 versions are released.

As a reminder, the current due date for employees to receive their copy is January 31, 2018. It is unknown if the deadline will be extended as had been the case for 2015 and 2016.


Visit the IRS website for more information.

Need assistance completing your 2017 Form 1095 requirements? Schenck can help. Visit the Schenck web page: Form 1095: Schenck is ready to assist you!

If you have any questions, please contact Terri Lillesand or another member of Schenck’s Health Care Reform team:

Terri Lillesand, CPA, tax shareholder, is a member of Schenck’s Health Care Reform Act Advisory team. She provides tax compliance and planning for corporate, individual, partnership, non-profit and fiduciary taxpayers.