This week, the United States House of Representatives and the United States Senate passed what is being referred to as the "Tax Cuts and Jobs Act.” The President is expected to sign the tax reform legislation shortly.
The Tax Cuts and Jobs Act includes a few provisions that impact employee benefits. A much talked-about provision is a change to the individual mandate required by the Affordable Care Act (“ACA"). The Tax Cuts and Jobs Act reduces the penalty for an individual not having health coverage to $0. Under the ACA, individuals were required to have health coverage meeting certain minimum value each month, qualify for an exemption, or pay a tax penalty. The penalty will be reduced to $0 starting in 2019, which in operation nullifies the individual mandate.
It is important to note that the requirement for individuals to have proper health coverage in 2017 and 2018 remains in place. Individual income tax returns electronically filed for 2017 must have the individual mandate question completed (see our prior article by clicking here.) It is also important to note that the Tax Cuts and Jobs Act does not make any changes to the requirement for applicable large employers to offer health coverage to their full-time employees, or the requirement to furnish ACA reporting forms (Forms 1094/1095) to individuals and the IRS.
For help with ACA reporting and compliance, contact your account manager or solutions@BASusa.com.