If you turn on the TV or social media, you will undoubtedly hear someone say that the Trump Administration has plans to repeal and replace Obamacare, or the Affordable Care Act.  For most Americans, that means that insurance that was purchased “on the Marketplace” may be affected.


Since there have been no changes made, the employer mandate is still completely in effect. Employers under the mandate must still issue the appropriate forms to their employees and submit the appropriate files to the IRS by the established due dates. 

So, what do the “plans to repeal and replace Obamacare” really mean for the Payroll Professional in the future?  

Potential Changes

  •  A withholding for an additional Medicare tax of 0.9% on employees’ annual income of more than $200,000
  •  Reporting whether full time equivalent employees and their dependents were offered affordable, minimal essential healthcare insurance by their employer.                                                            

The additional Medicare tax of 0.9% on employees’ annual income of more than $200,000 must be calculated for paychecks when any employee crosses that wage threshold, and all checks for the remainder of that tax year.  The Employee/Employer Medicare amounts are more complicated when this caveat comes into play because the two portions are no longer identical, as there is no additional tax paid by the Employer.  Form 941 reporting also must show these additional taxes, as should W2 reporting.  This tax calculation could be affected by a repeal or redesign, which would trickle down to a change to Form 941 reporting and W2 reporting.

The burden of 1095-C and 1094-C reporting was unprecedented since W2 reporting was implemented in 1944.  Beginning with reporting the aggregate cost of employer provided healthcare in W2 Box 12 with Code DD in an effort to better educate healthcare consumers about their healthcare costs, Affordable Care Act reporting matured into employers’ 1094-C and 1095-C and insurance provider/self-insured employer 1093-C forms issued to all employees.  These reporting requirements could be affected by a repeal or a redesign by the new administration.

Changes will not happen overnight, and they may happen in stages. However, it is very likely that Payroll Professionals will be affected in some manner by alterations that the Trump Administration will make to the existing Affordable Care Act, so stay alert! 

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