What was the proposed challenge?
Supreme Court Justices voted to spurn proposed changes to the Patient Protection and Affordable Care Act (PPACA) P.L. 111-148. The challenge came from more than a dozen states in opposition of individual mandate P.L. 115-97 of the Tax Cut and Jobs Act, which removed the penalty for those individuals who select to forego minimum essential health coverage. The latest case is the third attempt to challenge the Act, established in 2010.
What does the decision mean?
The decision, made June 17, favors the millions of Americans who are relying on the coverage by the Affordable Care Act. A report issued by the Department for Health and Human Services earlier this month identified 31 million Americans currently covered by the Affordable Care Act. In addition to individuals who have declined to obtain insurance, the Act’s provisions also protect insurance coverage for individuals with pre-existing conditions and adult children up to 26 years of age. While future disputes are possible, Thursday’s decision represents a stern defense of the law. Former President Obama said on Twitter, “This ruling reaffirms what we have long known to be true: the Affordable Care Act is here to stay.”
Additionally, many individuals filed a protective refund claim for years 2016 and/or 2017. That protective refund claim provided additional time to request, if available, a refund of net investment tax on a year that was closed due to the three-year statute of limitations. Since the decision upholds the individual mandate, those protective refund election claims are now void. The previous Net Investment Tax stands as calculated, and refunds are not available. If you filed a protective refund claim with the IRS for either 2016 or 2017, expect follow up correspondence confirming the dissolution of these claims and the associated refund requests.
Questions?
As always, VonLehman’s specialists will continue to monitor the situation and provide timely updates as they are made available. For any questions related to the Patient Protection and Affordable Care Act, the Tax Cut and Jobs Act, or other accounting legislation, please contact Jami Vallandingham at jvallandingham@vlcpa.com or 800.887.0437.
