Several Affordable Care Act Provisions To Take Effect in 2015

Several provisions of the Affordable Care Act are expiring or taking effect for the first time in 2015, which could pose challenges, The Hill reports.

Employer Mandate Kicks In; Some Stakeholders Pressing for Changes

The ACA's employer mandate, after being delayed twice, goes into effect for large companies this year (Ferris, The Hill, 1/1).

The employer mandate requires businesses with more than 50 full-time employees working 30 hours or more per week to provide affordable health insurance coverage to workers or face fines.

Under a timeline released by the Department of Treasury and Internal Revenue Service in February, mid-sized businesses that employ 50 to 99 full-time workers will have another year to provide health insurance coverage to employees. These employers will not face fines for failing to provide coverage to workers until 2016, according to the final rule.

Meanwhile, businesses that employ 100 or more full-time workers will be subject to the mandate starting this year. However, the final rule gives these employers more time to ramp up coverage. To avoid fines, large employers only need to offer coverage to 70% of workers in 2015, rather than 95%. They will need to start offering coverage to 95% of workers in 2016 (California Healthline, 11/12/14).

House lawmakers have voted several times to either delay or repeal the mandate, and the incoming Senate GOP leadership has raised the possibility of holding similar votes this year, according to The Hill (The Hill, 1/1).

In addition, some business groups and GOP lawmakers are expected to continue their push to raise the mandate's threshold for full-time workers from 30 hours a week to 40 hours a week, according to CQ Roll Call. The House approved a bill (HR 2575) in April 2014 that would have raised the threshold, but it did not advance in the Senate. According to Katie Mahoney, executive director for health policy at the U.S. Chamber of Commerce, House lawmakers will reintroduce the measure in "the first week in January when they get back" (Young, CQ Roll Call, 12/31/14).

First Tax Season for Individual Mandate Fines, Subsidy Corrections

This year's tax season also will be the first in which individuals could face financial penalties for not having health coverage under the ACA's individual mandate, according to The Hill.

Under the individual mandate, most U.S. residents are required to purchase coverage or face penalties of at least $95 for an adult or 1% of an individual's income, whichever is higher.

According to The Hill, the IRS could face challenges enforcing the mandate as a result of recent budget cuts (The Hill, 1/1). The agency since 2010 has had its funding decrease by nearly $1 billion and its number of full-time employees cut by 13,000. Tax preparers expect the individual mandate to be only "lightly enforced" in 2015, according to the Wall Street Journal.

The enforcement of the mandate largely will rely on consumers to answer honestly about whether they have coverage, although the IRS has said that it could use its regular enforcement mechanisms, such as requesting additional documentation or conducting audits. According to the Journal, the IRS, CMS and other federal agencies in January will reach out to U.S. residents via emails, telephone calls and text messages to explain what they should expect during this year's tax season.

Meanwhile, this year will also be the first that individuals could potentially need to repay IRS if they incorrectly calculated their projected 2014 income and received insurance subsidies that were larger than for which they were eligible. Some individuals will receive larger tax refunds if they received too little in subsidies.

Up to half of the about 6.8 million U.S. residents who received subsidies could have to pay back the IRS, according to an estimate by H&R Block. In addition, Vanderbilt University assistant professor John Graves found that subsidies would be $208 too high if individuals calculated them based on their most recent tax returns (Armour/Radnofsky, Wall Street Journal, 1/1).

Other 2015 Challenges

Other potential challenges to the ACA and other health programs this year include:

• Addressing the scheduled expiration of funding for the Children's Health Insurance Program, which was reauthorized under the ACA, in September 2015;
• Cuts in Medicare funding faced by providers for failing to demonstrate meaningful use of electronic health records (The Hill, 1/1);
• King v. Burwell, a Supreme Court case challenging federal subsidies given to U.S. residents to purchase coverage through the federal exchange (Kenen, Politico, 12/31/14); and
• The end of a temporary increase in Medicaid reimbursements for primary care physicians, which could affect access to care (The Hill, 1/1).

Messaging Challenge

In addition, supporters of the ACA face challenges brought about by the ACA's continued unpopularity, as GOP lawmakers, backed by outside groups, continue to advocate for dismantling the law.

According to Politico, the White House and other ACA supporters are employing a messaging strategy this year that will highlight personal stories of individuals who are pleased with their coverage.

However, supporters of the law have less funding than they did around the law's passage to defend it from political attacks, as many groups moved their focus from the ACA to other priorities after its passage. According to an analysis by Kantor Media, advertisements that were critical of the ACA outspent ads in support of the law by a five to one margin in mid-2013. In addition, a Kaiser Family Foundation study found that supporters were outspent even more during the 2014 midterm elections (Politico, 12/31/14).