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Q2 Legislative Updates
Q4 Legislative Updates 

Our Legislative Updates will keep you up to date on the latest news on healthcare reform. Here are some topics we are following.

A federal appeals court Wednesday ruled a central feature of the Affordable Care Act was unconstitutional, but it ordered a Texas trial judge to reconsider a ruling that invalidated the entire 2010 healthcare law.

The decision sends the case back to U.S. District Judge Reed O’Connor in Fort Worth, Texas. O’Connor has to be more specific about which parts of the law can’t be separated from the mandate, and also must take into account Congress’ decision to leave the rest of the law essentially unchanged when it reduced the penalty for not having insurance to zero.

As a result, the ACA prevails. The Employer Mandate remains in full effect and the IRS continues to assess potential penalties for non-compliance.

On Tuesday, the U.S. House of Representatives approved a $1.4 trillion spending package to avert a partial government shutdown that would permanently repeal three of the Affordable Care Act’s (ACA) taxes and encourage corporations to buy lower-cost plans for employees.

It calls for a permanent repeal of:

  • A health insurance tax beginning in 2021.
  • The Cadillac tax, a 40 percent excise tax on high-cost employer plans, that never went into effect.
  • The ACA's 2.3 percent excise tax on the sale of medical devices.

On November 29, the U.S. Treasury released Notice 2019-63, extending the due date for employers and providers to issue health coverage forms to individuals for the 2019 tax year.

Note to Health e(fx) clients: To remain as efficient as possible, Health e(fx) will not be changing form fulfillment deadlines.

Effective in 2019, the federal penalty for individuals not carrying health insurance was reduced to $0. Now, add California to the list of states enacting their own individual mandate options. The mandate, signed into law this summer, will take effect Jan. 1, 2020. In many ways the law is similar to the mandates passed in other states, including New Jersey. But there is one clause all employers with employees who reside in California certainly will want to be mindful of.

The Internal Revenue Service (IRS) recently announced updated affordability percentages that are effective for taxable years and plan years beginning January 1, 2020.

The IRS is decreasing the affordability percentage index from 9.86 percent in 2019 to 9.78 percent for the 2020 plan year. Coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed 9.78 percent of the employee’s household income.

What does that mean for employers?

We know the 2019 ACA reporting season has just begun, but that also means your 2020 season has started too. It's time to start thinking about future reporting years.

The penalties for not complying with the ACA in 2020 are going to increase. Take the time to review your plan and reporting and ensure you’re not making basic mistakes that may result in fines.

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