2018 ACA Reporting & CSR Subsidy Update

Why Cost Sharing Reduction subsidies may be restored and what you need to know for the 2018 reporting year.

The fate of the Affordable Care Act (ACA) is being challenged once again. Last week, oral arguments began in a lawsuit which says the ACA is now illegal. Twenty states have joined the lawsuit which stems from the Individual Mandate tax penalty being zeroed out next year. Technically, the requirement to have health insurance still exists under the ACA, but there will no longer be a penalty for being uninsured. These states say this fact makes the ACA unconstitutional. 

In 2012, the U.S. Supreme Court heard a case which challenged the legality of the Individual Mandate. At the time, the lawsuit alleged that requiring a person to buy something (health insurance) exceeded the power of Congress. The lawsuit further alleged that Congress only has the power to regulate commerce, but it cannot force someone to engage in it. In the end, the Supreme Court ruled that the Individual Mandate was legal because there was a tax penalty associated with it, and Congress has the power to impose taxes. 

The twenty states who filed suit are using the previous Supreme Court ruling as their primary argument to take down the ACA. They argue that there can’t be a requirement to purchase health insurance without a tax penalty. Furthermore, they argue that the entire ACA must be suspended or terminated because the Individual Mandate is so critical to other parts of the law. 

It’s unclear how long this lawsuit will take or what the final ruling will be, however, this lawsuit will likely be making headlines for the foreseeable future.

2018 ACA Reporting Requirements

The Internal Revenue Service (IRS) has released draft versions of the forms and instructions for the 2018 reporting year. The reporting, which is required under the Affordable Care Act (ACA), helps the IRS enforce the Individual Mandate, Employer Mandate and verify subsidy eligibility for individuals who obtain coverage through the Health Insurance Marketplace. 

In general, employers with 50 or more employees must complete Forms 1094-C and 1095-C. Smaller employers with self-insured plans and insurance carriers providing fully-insured coverage must complete Forms 1094-B and 1095-B. The forms must be submitted to the IRS by February 28, 2019 if filing manually and by March 31, 2019 if filing electronically. However, copies of the forms must be provided to employees and covered individuals by January 31, 2019. 

Copies of the draft forms and instructions have been provided below. Final versions are expected to be released later this year. 

Draft 1094-B

Draft 1095-B

Draft B Form Instructions

Draft 1094-C

Draft 1095-C

Draft C Form Instructions

CSR Subsidy Update

A court has ruled that the federal government violated its obligations under the Affordable Care Act (ACA) when it discontinued making payments to insurance carriers for cost-sharing reduction (CSR) subsidies. CSR subsidies are available to eligible individuals with household incomes up to 250% of the Federal Poverty Level (FPL). These subsidies help reduce out-of-pocket costs for eligible individuals who obtain coverage through the Health Insurance Marketplace, and they are paid to insurance carriers. 

The Trump administration discontinued making CSR subsidy payments after October of 2017 because Congress never appropriate funds for this purpose. However, last year, a different court refused to require the federal government to make CSR subsidy payments, and the case was later dismissed. As a result, there continues to be uncertainty about if or when the CSR subsidy payments will be restored.


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