A federal court in northern Texas issued a ruling on Friday that calls into question the constitutionality of the Patient Protection and Affordable Care Act (ACA).

What should employers do right now?

Employers should continue to comply with the ACA, including preparing to meet their 2018 reporting obligations, which are due in early 2019. The Employer Mandate, which requires large employers to offer affordable, adequate coverage to substantially all employees or face a shared responsibility payment, continues in full force.

What is the case about?

Texas v. U.S. was brought by a group of 20 states’ attorneys general and governors, contending that last year’s passage of the Tax Cuts and Jobs Act of 2017 invalidated the Individual Mandate of the ACA, and that without the Individual Mandate, the entire law is invalid. At the heart of this argument is an assertion that Congress’ decision to reduce the Mandate’s penalty to zero starting January 1, 2019 effectively eliminates the Mandate itself.

What could happen next?

For now, nothing changes for employers or for individuals and small businesses accessing health insurance via the Public Exchange (Marketplace). Federal agencies will continue to enforce the law until higher courts have an opportunity to review it. It is expected that there will be a series of appeals. The case could potentially proceed all the way to the United States Supreme Court.

Does this impact the Form 1094 and 1095 reporting deadlines?

No. Employers must continue to report to the IRS using Forms 1094 and 1095. Applicable large employers (those with 50 or more full-time employees, including equivalents, during the prior calendar year) need to prepare now to file on time. Timely filing means distributing Form 1095 employee statements on or before March 4, 2019 and filing Form 1094-C, together with copies of all Forms 1095-C, by either February 28, 2019 (paper filings) or April 1, 2019(electronic filings).

We’re Here to Help

As always, American Fidelity is committed to providing our customers with up-to-date information on employee health and welfare benefits compliance. For more information about this and other regulatory developments, visit our website at HCReducation.com.

 

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