ACA & Owner Operators – What Trucking Companies Need to Know
July 7, 2017
Author: Ben Droessler
Individual penalty/tax: In February 2017 the IRS announced it will not automatically reject 2016 tax returns that do not certify compliance with the individual mandate to buy health insurance. Meaning no enforcement of the individual mandate penalty based on President Donald Trump’s executive order. Simply put, the law requiring coverage still exists, but the IRS is not enforcing it
Employer trap: Participants buying health insurance from the individual marketplace who receive a subsidy are required to enter their “employer”, in which Owner Operators mistakenly enter your information. This triggers the Department of Health and Human Services to send you a Section 1411 Certification letter stating that you may be subject to the Employer Shared Responsibility Payment. Please do not ignore this letter! Instead, submit an Employer Appeal Request (link https://www.healthcare.gov/downloads/marketplace-employer-appeal-form.pdf). Provide detailed clarification the “employee” in question is in fact an independent contractor and include a copy of the owner operator contract. Response to these notices is critical in reinforcing independent contractor status of your owner operators.
Employer penalty: At this time, the IRS admits they cannot identify companies subject to employer penalties under ACA. Major issues hinder enforcement including canceled development of key systems needed to identify noncompliant employers. Similar to the individual penalty/tax, the law requiring employers offer coverage still exists, but the IRS is not enforcing it.
At the time of writing, President Trump and Congress continue to hash out the future of healthcare. Regardless of the outcome, trucking companies with Owner Operators need to remain vigilant defending independent contractor status for healthcare responsibility.
Contact Ben Droessler with Cottingham & Butler’s Contractor Services Team.
Truck Insurance Group, Vice President