Supreme Court Agrees to Hear ACA Challenge; IRS Says No Statute of Limitations for ACA Penalties

SCOTUS Ruling Expected After Presidential Election

The Supreme Court announced it will hear a challenge to the validity of the ACA* during the session that begins in October of 2020, making it unlikely that the high court could issue a ruling prior to the November presidential election. Insurers, employers and consumers will look to the Supreme Court to address whether pieces of the law (namely, the ACA’s individual mandate) can be struck down while other components, such as consumer protections for individuals with pre-existing conditions, can continue.

No Time Limit on Enforcing IRS ACA Employer Penalties

In other recent news, the Internal Revenue Service (IRS) issued a memo indicating that no statute of limitations applies to penalty assessments under the ACA’s employer mandate. In Office of Chief Counsel Memorandum 20200801F, the IRS explains there is no applicable statute of limitations on assessment because there is no tax return filed to report an employer’s liability for the penalty assessment. This means the IRS could go back for an indefinite amount of time to seek payment from employers.

What You Need to Know

The ACA’s employer responsibilities continue in full force, including reporting requirements and the mandate that large employers offer affordable, adequate coverage or pay a proposed assessment.
Employers should regularly assess their exposure to penalties under the ACA and develop compliance initiatives to manage that risk.
ACA records related to determination of full-time status and offers of affordable, adequate coverage should likely be maintained indefinitely.