Enforcement of Employer and Individual Mandate – IRS confirms

The IRS recently released IRS Information Letters to address the Affordable Care Act’s (ACA) employer and individual mandates following President Trump’s executive order directing agencies to minimize ACA burdens. The executive order does not change the applicability of these laws.

Letters 2017-0011 and 2017-0017 are in response to taxpayer questions regarding application of the individual mandate. As a reminder, the individual mandate requires individuals to maintain minimum essential health coverage (MEC) for each month, qualify for a coverage exemption, or pay a penalty when filing their taxes. The letters confirm that, absent a coverage exemption, individuals should carry MEC or pay a penalty.

Letters 2017-0010 and 2017-0013 are in response to taxpayer questions regarding application of the employer mandate. Under the employer mandate, an employer with 50 or more full-time equivalent employees is required to offer minimum value, affordable coverage to full-time employees (those working 30 hours or more per week) or face a potential tax penalty. The letters state that there is no provision in the statute (establishing the employer mandate) that provides for a waiver of an employer mandate tax penalty for financial or religious reasons.

Letters 2017-0010, 2017-0013 and 2017-0017 specifically note that the above referenced executive order does not change the law - only legislative action can change the statutory provisions of ACA.

While the letters do not necessarily provide new information, they are indeed a reminder that the ACA (including the employer and individual mandates) is still the law of the land and requires compliance despite legislative efforts to repeal it and administrative action to otherwise modify it.

IRS Letter 2017-0011    IRS Letter 2017-0017    IRS Letter 2017-0010    IRS Letter 2017-0013

President Trump's Executive Order

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