11.12- The Affordable Care Act

The Affordable Care Act contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations and government entities. These tax provisions contain important changes, including how individuals and families file their taxes. The law also contains benefits and responsibilities for other organizations and employers.

Filing Season 2020

Under the Tax Cuts and Jobs Act, passed December 22, 2017, the amount of the individual shared responsibility payment is reduced to zero for months beginning after December 31, 2018.

Beginning in tax year 2019, Form 1040 and Form 1040-SR will not have the "full-year health care coverage or exempt" box and Form 8965, Health Coverage Exemptions, will no longer be used. You need not make a shared responsibility payment or file Form 8965, Health Coverage Exemptions, with your tax return if you don't have minimum essential coverage for part or all of the year.

Claiming and Reconciling Premium Tax Credit

If you purchased coverage through the Health Insurance Marketplace, you may be eligible for the premium tax credit.

• Find out if you are eligible for the credit.

• Claim and reconcile the credit on Form 8962.

• Report changes in circumstances.

Small Employers

Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees, including full-time equivalent employees.

If you have fewer than 50 employees, but are a member of a group with a certain level of common or related ownership with 50 or more full-time employees, including full-time equivalent employees, you are subject to the rules for large employers.

Here are the responsibilities and benefits for small employers under the health care law:

Coverage

You can purchase insurance through the Small Business Health Options Program (SHOP). Learn more at HealthCare.gov.

Reporting

• You must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000.

• You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.

• If you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.

Payments & Credits

• You may be eligible for the Small Business Health Care Tax Credit if you cover at least 50 percent of your full-time employee's premium costs and you have fewer than 25 full-time equivalent employees. See the Small Business Health Care Tax Credit Estimator.

• If you self-insure, you may be required to pay a fee to help fund the Patient-centered Outcomes Research Trust Fund.

Large Employers

Some of the provisions of the Affordable Care Act, or health care law, apply only to applicable large employers, generally those with 50 or more full-time employees, including full-time equivalent employees. For example, applicable large employers have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees (and their dependents).

Applicable large employers can find resources and the latest news at the Applicable Large Employer Information Center.

Coverage

• If you have 100 or fewer employees, you may be able to purchase affordable insurance through the Small Business Health Options Program (SHOP) Marketplace.

• Learn more at HealthCare.gov.

Reporting

• You must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000. Learn more.

• You may be required to report the value of the health insurance coverage you provided to each employee on his or her Form W-2.

• You must file an annual return reporting whether and what health insurance you offered your employees.

• If you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover.

Payment & Provisions

• You must either offer affordable minimum essential coverage that provides minimum value to your full-time employees (and offer coverage to the full-time employees’ dependents), or potentially owe an employer shared responsibility payment. Learn more about the employer shared responsibility provision.

• If you self-insure, you may be required to pay a fee to help fund the Patient- Centered Outcomes Research Trust Fund.