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Repeal of Individual Responsibility Coverage Mandate Penalty effective as of January 1, 2019

January 9, 2018

How and when did this happen?

Congress has made good on their promise, and passed the tax reform bill – Tax Cuts and Jobs Act. This includes the repeal of the Affordable Care Act’s Individual Mandate Penalty, and the President signed the legislation on December 22nd.

To access the full bill (and read all 494 pages of it), click here.

What does this mean?

Since 2014, taxpayers have been required to maintain Minimum Essential Coverage (MEC) for each month, qualify for a coverage exemption, or pay a penalty (Individual Responsibility Coverage Mandate Penalty) when filing their federal income tax return each year.

Effective January 1, 2019, the Individual Responsibility Coverage Mandate Penalty will be repealed, which means individuals will no longer need to maintain health coverage, or pay the penalty.

Please note – the individual mandate remains in effect for 2017 and 2018. The Internal Revenue Service (IRS) has indicated that individual tax returns filed electronically in 2018 will not be accepted unless the coverage requirements have been addressed; paper filings that do not address these requirements may be suspended until additional information is submitted, and refunds may be delayed.

When does this begin?

The penalty for not having coverage will end as of January 1, 2019. The other tax provisions in the bill take effect on other various dates.

Please be aware that the individual mandate repeal does not mean the Affordable Care Act (ACA) in its entirety will be repealed. Americans can still access subsidies, and for those that qualify, the expanded Medicaid program.

For businesses, this legislation does not eliminate the Employer Shared Responsibility/Play or Pay Mandate, or the associated Form 1094 and 1095 reporting requirements. And, let’s not forget, the Cadillac Tax is still slated to begin in 2020.

If you have any questions of how this new law impacts your employee benefits plan, contact your Account Management team at Brown & Brown Benefit Advisors. For information on how BBBA can help your organization with an employee benefits program, please email Jason Della Penna at

Brown & Brown Benefit Advisors