Mar 07, 2017

According to reports, the newly-elected Trump Administration has ordered the Internal Revenue Service to make a small change to the current affordable care act. This small change could have some big implications for ObamaCare then many people expect. Under the current law, citizens have to declare whether they have health insurance or not on line 61 on the IRS 1040 tax form, but after President Trump’s recent executive order on the affordable care act, otherwise known as “ObamaCare” the president has asked for the IRS to not reject those 1040 forms where the answer of whether or not the filer has got health insurance has been left blank.

Previously, the IRS was planning not to process any 1040 forms where the answer to the insurance question was left blank. This meant that a person was left with no choice but to either get insurance or inform the IRS that they were uninsured, in which case they would have to pay the ‘individual mandate penalty’ which was mandated by the ACA. Just last year the full cost of the burden of having to pay the penalty was said to be at $650 per adult.

Healthcare policy experts had previously predicted that the strict penalties that were being imposed could help drive more enrollment with ObamaCare, which seems to be something that has turned out to be more expensive than initially expected. According to health policy experts, the tax agency can still ask the filer on the reason why they left the answer to the insurance question blank, but that decision will be left to the tax agency. That being said, it is highly unlikely that the tax agency is going to question each and every filer why they left line 61 in IRS terms “silent.”

While the Democrats cry foul on the recent decision which has been made by the President, in a statement right after the decision was made, an IRS official said that the recent executive order regarding the 1040 form will allow the IRS to accept forms that do not indicated anything about their insurance coverage status. This is good news for filers, since processing these silent forms means that the tax payers returns do not need to be systematically rejected as it has been till now. Furthermore, allowing the forms to be processed minimizes the burden on the taxpayers, as well as on those who are expecting a refund.

The recent executive order allows the IRS to grant delays, exemptions and waivers to Obamacare provisions which would impose costs on both states and individuals. The new executive order is unclear about what the IRS can or cannot do in terms of the fines that apply for failing to secure coverage.

Up until now, insurers have seen the coverage requirement as an individual mandate and an essential tool to nudge healthy people into getting insurance coverage. Without it, experts believe that the broad exemptions could lead to a spike in premiums for those who do currently have health coverage.

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