Chairman Chabot Responds to IRS’s Confirmation of ACA Employer Mandate Enforcement and the Effect on Small Businesses
Washington, August 17, 2018
WASHINGTON – This week, House Committee on Small Business Chairman Steve Chabot (R-OH) released a statement about the Committee’s ongoing inquiry with the Internal Revenue Service (IRS) regarding the agency’s enforcement of the Affordable Care Act’s (ACA) employer mandate and its effect on America’s small businesses.
“After receiving additional data and information from the IRS, it’s clear that small businesses are still suffering from Obamacare. While the IRS, like other federal agencies, is obligated to enforce the laws under its jurisdiction, small businesses who already compete with large companies now have the IRS knocking on their doors to collect on a flawed law the previous Administration put in place but failed to enforce for years. As I suspected, this troubling response from the IRS indicates that, as of March 30, 2018, IRS has identified nearly 10,000 small businesses who may be subject to hefty fines from fiscal year 2015 alone, and IRS indicates the enforcement actions will continue. While the Tax Cuts and Jobs Act effectively ended the burdensome individual mandate and the Administration has expanded health insurance choices and flexibility for employers and employees through rulemaking, small businesses are still subject to IRS’s enforcement actions and have no relief in sight. Small business owners should be focusing their time, energy, and resources on operating and expanding their businesses, instead of dealing with surprises from the IRS. Congress must work towards repealing and replacing Obamacare to relieve employers and the millions of Americans they employ from this unwieldy burden.”
Background: On December 14, 2017, Chairman Chabot sent a letter to the IRS requesting information and data about IRS enforcement of the ACA’s employer mandate. Because the ACA’s definition of large employers is out of line with the rest of the federal government and the Obama Administration failed to enforce this rule for years, these sudden actions are catching many employers by surprise.
On January 3, 2018, the Committee received an interim response from the IRS confirming their initiation of enforcement actions targeting employers with 51 or more employees who work 30 or more hours a week that did not provide health insurance for FY2015. While this letter did not address the questions the Committee requested, the letter specified that additional information would be forthcoming.
On July 9, 2018, Acting Commissioner David Kautter sent additional information to the Committee responding to the specific questions asked in the December letter. These answers can be viewed here.