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Congress Pursues Bill to Stop IRS From Enforcing Individual Mandate

Christina Mattina
A House Subcommittee has passed an appropriations bill that would direct the Internal Revenue Service (IRS) to stop implementing the tax on Americans without health insurance known as the individual mandate.
A House Subcommittee has passed an appropriations bill that would direct the Internal Revenue Service (IRS) to stop implementing the tax on Americans without health insurance, commonly known as the individual mandate.

The individual mandate, which requires each individual to purchase health insurance or else face a financial penalty, is one of the least popular components of the Affordable Care Act (ACA), particularly among Republicans in Congress. The House has passed an ACA replacement bill which repealed the mandate and instead specified a 30% premium increase for those who do not maintain continuous coverage. The Senate’s proposed health bill does not include this premium increase, but it would require a 6-month “lock-out” period between signing up and getting covered, in order to deter people from only seeking insurance when they are sick.

As the Senate contemplates its potential avenues for devising a health reform bill that at least 50 Republicans can agree on, the House Committee on Appropriations is taking matters into their own hands, at least concerning the individual mandate. Its Financial Services and General Government Appropriations bill for fiscal year 2018 would bar the IRS from collecting the individual mandate tax, completely independent of the ACA repeal efforts ongoing in the Senate.

The relevant paragraph declares that “None of the funds made available by this Act may be used by the Internal Revenue Service to implement or enforce section 5000A” of the tax code, which implements the individual mandate penalty. According to a press statement announcing the bill’s release, it “also includes a provision prohibiting funds to pay for an abortion or the administrative expenses in connection with a multi-state qualified health plan, with certain exceptions.”

In the press release, Committee members seemed to indirectly reference the mandate repeal, along with the broader theme of easing federal regulation, as one of the bill’s highlights. Rep. Tom Graves (R-Georgia), chairman of the Financial Services Subcommittee, said he was “particularly excited about the financial reforms, which slash harmful regulations.” Similarly, Rep. Rodney Frelinghuysen (R-New Jersey), House Appropriations Chairman, lauded the bill for “stopping burdensome regulations before they can damage our economy irreparably.”

The bill was passed by Graves’s subcommittee the day after it was released. If made law, the changes would go into effect for the fiscal year beginning on October 1, 2017. It would achieve one of President Donald Trump’s main goals, as he had signed an executive order affecting the ACA on his first day in office. That order called on federal agencies, including the IRS, to take “all actions consistent with law to minimize the unwarranted economic and regulatory burdens” of the ACA.

Specifically, the executive order had targeted the individual mandate by urging agencies to waive or grant exemptions from the fees, taxes, and penalties of the ACA wherever legally possible. The New York Times reports that the IRS soon announced it would accept tax returns even if the filer had not indicated whether they had health insurance during the year, which was previously a requirement that would lead to returns being rejected if the coverage information was not included.

 
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