On May 4th, a bill that would replace the Affordable Care Act was passed by the House. The bill would eliminate the need for employers to calculate whether they had 50 or more full-time equivalent employees in a year and repeal most taxes under the law.
Under this new bill, known as the American Health Care Act of 2017 (H.R. 1628), employers providing health insurance for any month of the year are required to report certain information. They would need to report this information to the IRS on Form W-2, Wage and Tax Statement. This information includes the policy premiums paid, advance payments made on behalf of an employee, and the months the insurance was applicable to the employee.
Will Journey Employer Solutions report this information? For clients that request and need this reporting, Journey Employers Solutions will complete their reporting for them. If the bill becomes law, Journey will release details on how we support our clients with this new law.
What happens to current penalties? Penalties for applicable large employers that do not offer sufficient health coverage to full-time employees and dependents would be eliminated under the measure, retroactive to January 1st, 2016. Employers would no longer need to calculate whether they had at least 50 full-time equivalent employees in a year.
What about self-only coverage? Under the measure, the limit for self-only coverage would increase from $3,400 for 2017 to $6,550 in 2018. The limit for family coverage would increase from $6,750 for 2017 to $13,100 in 2018. Applicability of an excise tax of 40 percent on employer-sponsored benefits from particular high-cost health plans, also known as the “Cadillac” tax, would be delayed from January 1st, 2020 to January 1st, 2025.
What are the current concerns of the bill? Currently, the major concern is if individuals with pre-existing conditions will be able to receive affordable health care. The bill is not official and things may be added and/or changed when it’s in the Senate to relieve that concern.
Journey will be watching as this bill moves to the Senate and will keep you updated on any changes that may impact your business. For questions regarding policy specifics, please ask Journey Payroll for a personal recommendation to a trusted local health broker.