The IRS Relaxes Enforcement of ACA Mandate Penalties

As the new administration plans drastic changes to the Patient Protection and Affordable Care Act (ACA), the Internal Revenue Service (IRS) has eased enforcement of the ACAs individual mandate, the portion of the law that requires people to have medical insurance coverage or risk penalties.

The IRS had previously stated that it would start rejecting returns that did not specify whether the taxpayer had health insurance coverage. With this new directive, the IRS will continue its past practice of processing the returns. The move, announced on February 15, 2017, comes in response to the executive order from President Donald Trump that directs federal agencies to interpret ACA regulations as loosely as possible to minimize the financial burden on individuals, insurers, healthcare providers and others.

The individual mandate was included in the ACA so that younger and healthier people would be brought into the insurance pool. The reasoning is that their participation would help keep premiums low since these members of the population generally require less medical care (and therefore less money in payments from the insurance companies).

It is important to note that this change in enforcement does not affect the law itself; penalties for individuals and businesses regarding this or other ACA stipulations can still apply. As always, it is best to consult your human resources department or a business/tax consulting professional to make sure you are in compliance.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.