Will the Affordable Care Act be repealed?
The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years – especially as it relates to the Affordable Care Act. To get a sense of what changes might be on the way, the Journal of Accountancy recently spoke with Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, about the future of the ACA.
When you think about what should employers do to prepare for a possible repeal of Obamacare, that’s a pretty complicated question, because we don’t really know what the repeal is going to look like exactly.
So one piece of advice is, well, for the moment, keep doing what you’re doing, because it hasn’t been repealed yet. So, in particular, one of the things that employers put a lot of effort out on is the information reporting, the forms that have to be given to all full-time employees and that have to be remitted to the IRS. There’s nothing to indicate that that’s going to suddenly stop. I think employers would be well advised to stay the course and plan on doing those. It doesn’t seem likely that that requirement will go away. So that's number one, just keep doing what you’re doing.
I would say in terms of looking to the future to start thinking about, what are we hearing in the news, what might the replacement of the ACA look like, and how does that impact what we’re offering to our employees? So an example would be, that right now there’s a dollar limit on the amount of health care flexible spending arrangements. That was an Obamacare provision. Previously, there was no cap on that. That [cap] likely, it seems to me, will go away under the replacement of the Affordable Care Act, so employers can start thinking, “OK, what limit, if any, do we want to impose on those once we no longer have a statutory limitation on that?”
Another big issue that’s been very controversial is the definition of a full-time employee. So under the Affordable Care Act, the standards for coverage are, full-time employees, that’s defined as a person who works an average of 30 or more hours per week. And a lot of employers said, “What a minute, full-time is really 40 hours per week.” Well, that will likely go away because the employer mandate will go away.
So how does that affect the employees to whom coverage is offered? Do you change it if you now have it at 30, do you change it to 40? So there are a lot of considerations like that where I think, the smart thing for an employer to do is sort of a side-by-side. Here are the things that it looks like may happen, may change. And here’s what we’re doing. And so how may we want to react to that?
But that’s really on down the road. I think the key is to keep a close eye on what’s happening out there. Read the reports. Read the newspapers. Stay tuned to see what those changes may look like.