ACA Update: Effects on Small Business Health Insurance

There's the ACA and the AHCA... Which one is in effect and how does it impact small business health insurance that employers are providing?



Is the ACA still in effect?

First there was the Affordable Care Act (ACA), then there was the American Health Care Act (AHCA). The question now: which one is in effect and how does it impact small business health insurance that employers are providing? In other words, should businesses comply with the ACA or the AHCA?

Here’s the short answer: the ACA is still in effect. In July of 2017, legislation was introduced to repeal and replace the ACA with the American Health Care Act (AHCA). After the measure was defeated, the Senate stepped away from healthcare and has yet to determine when it will re-address the topic in the future.

The IRS recently released four letters (2017-0010, 2017-0011, 2017-0013, and 2017-0017) confirming that all obligations and subsequent penalties for a qualified employer’s lack of ACA compliance are still in effect. Although there may be more efforts in the future to repeal/replace or simply amend components to the ACA, employers should continue with all current compliance requirements of the ACA.

Healthcare and ACA: Employer Requirements

Employers with 50+ employees must provide affordable health insurance coverage for their full-time employees (30+ hours/week) that includes the minimum essential health benefits. To comply, employers must track and report hours to the IRS and provide documentation regarding their health insurance plan and participants. Qualified employers that don’t provide both of those elements are subject to penalties. See this refresher of all Obamacare requirements.

Status of the ACA’s Individual Mandate

Because the ACA has not been repealed and replaced, it also means that the individual mandate is still in effect: every person in the U.S. is required to have some sort of major medical insurance or face a tax penalty.

Effect of the Executive Order to minimize the ACA’s impact on businesses and individuals

According to IRS letter 2017-0017, the executive order requesting that agencies minimize the impact of the ACA on individuals and businesses has not changed requirements for coverage or any other aspect of the ACA. Individuals and businesses must still comply with the mandate and adhere to the ACA requirements.

Details about ACA and small business health insurance

For questions about business compliance requirements regarding employer-provided health insurance or the ACA, please see Are You Obamacare Compliant?. To learn more about small business health insurance plans that bring down costs while increasing benefits, please contact our HR experts at


Are you still ACA compliant? See our guide to find out!

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