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Affordable Care Act penalty still applies in 2018
By Employee Benefits Practice Group on January 2, 2018 at 11:30 AM

Taxpayer writing a checkSection 11081 of the Tax Cuts and Jobs Act — the new tax reform law passed by Congress in late 2017 — repeals the so-called “individual mandate” under the Patient Protection and Affordable Care Act (also known as the ACA, or more informally as Obamacare).

The individual mandate is set forth in Section 5000A of the Tax Code. It requires individuals to maintain minimum essential health coverage every month or else pay a tax penalty, also known as a “shared responsibility payment.” 

Importantly, the tax penalty still applies in 2018, as the repeal does not go into effect until 2019. In 2017, the amount of the penalty was $272 per month for an individual ($3,264 per year) and $1,360 per month for a family of five or more ($16,320 per year). The 2018 amounts are not yet known but are sure to rise.

Also, the employer mandate set forth in Section 4980H of the Tax Code — the requirement that applicable large employers offer coverage to full-time employees or pay a tax penalty — has not been repealed. Consequently, large employers must still make qualifying offers of coverage and navigate a challenging reporting process.

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