IRS Easing ACA Individual Mandate After Trump Order

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By Colleen Murphy

The IRS won’t require people to mark whether they have health insurance when filing their tax returns, a shift from current requirements under the Affordable Care Act’s individual insurance mandate.

The agency walked back a previous decision to require an indication of coverage on tax returns after President Donald Trump signed an executive order Jan. 20 requiring federal agencies to reduce the burden of the ACA. The law, which Republicans are jockeying to dismantle, requires individuals to maintain health coverage or pay a penalty.

After accepting returns that didn’t indicate coverage in 2014 and 2015, the Internal Revenue Service had set up a system for this year that would reject tax returns during processing if an individual didn’t provide health coverage information. The agency decided to continue accepting electronic and paper returns for processing, even if they lack the coverage information, following the executive order, according to an agency statement.

While the step may be seem to be a weakening of the ACA’s mandate, the IRS makes clear that the law is still in force and “taxpayers remain required to follow the law and pay what they may owe.” IRS Commissioner John Koskinen has previously said despite the flurry of activity on the Hill regarding the ACA, taxpayers should follow current law until there is a new one.

“I don’t see that as changing taxpayers’ filing obligation or payment of taxes and fees,” said Helen H. Morrison, a principal in Ernst & Young LLP’s national office and a member of the firm’s compensation and benefits practice. Morrison is on Bloomberg BNA’s legal and business advisory board.

The change was first reported by and the San Francisco Chronicle on Feb. 14 after the IRS quietly updated the information on its website.

Confusion and Delay

Taxpayers may receive follow-up questions from the agency after filing, similar to how returns have been handled in previous years, the IRS said in its statement.

But that back-and-forth could bring its own complications, Timothy Jost, a professor emeritus at the Washington and Lee University School of Law, told Bloomberg BNA.

“It’s a whole lot more efficient, if what we’re trying to do is operate efficiently, to just block the return at the front end and get people to fix it rather than having to write letters back and forth,” Jost said.

Digging Deeper?

House Republicans are meeting Feb. 16 to hash out the details of an ACA repeal and replacement plan. It is the third such meeting this week, as lawmakers work to rally consensus around a plan forward.

House Ways and Means Chairman Kevin Brady (R-Texas) told reporters Feb. 15 his presentation will focus on individual tax credits and health-savings accounts. He has vowed to scrap all of the ACA’s tax provisions and, though no markup date is set for a reconciliation bill, the committee has promised to bring relief in the coming weeks.

To contact the reporter on this story: Colleen Murphy in Washington at

To contact the editor responsible for this story: Meg Shreve at

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