Provisions of the Affordable Care Act (ACA)

Last updated on July 8, 2013

Enacted in March 2010, the Affordable Care Act (ACA) aims to provide affordable health care by reducing the overall costs of health care and making it mandatory for all Americans to have coverage.

Some of the provisions of the act have been implemented, and some will be implemented soon. The present provisions will impact the tax filing requirements of most individuals and businesses.

Filing requirements for employers include “report(ing) the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.”

Although the act encourages employers, both large and small to offer health insurance coverage to their employees, individuals who are not covered by their employers or any other health care or insurance program must get a private-insurance policy to avoid penalties.

Taxpayers should consider this information by the IRS when using professional tax assistance for Affordable Care Act: “Internal Revenue Code § 7216 is a criminal provision enacted by the U.S. Congress in 1971 that, except as provided in regulations, prohibits tax return preparers from knowingly or recklessly disclosing tax return information or using tax return information for a purpose other than preparing, or assisting in preparing, an income tax return. This provision applies to tax return preparers who also offer services and education related to the Affordable Care Act. Violators are subject to a $1,000 fine or a year in prison, or both.”