IRS won’t withhold tax refunds if Americans ignore ACA insurance requirement

The Washington Post reports:

The Trump administration is taking its first steps to put its imprint on the Affordable Care Act, reversing plans to withhold tax refunds this year from Americans who flout an insurance requirement in the law while proposing a series of rule changes to encourage insurers to remain in ACA marketplaces.

The Internal Revenue Service has revoked an Obama-era instruction to taxpayers that was taking effect during the current filing season as a way to further compliance with the ACA’s requirement that most Americans carry health insurance or pay a tax penalty. Under the instruction, the IRS had announced that it would no longer process tax returns for people who fail to send a notice with their returns that they have insurance, are exempt from the requirement or are paying the fine.

Instead, the agency said in a statement on Wednesday, tax returns will be processed as always, even for individuals who do not provide the required information. The IRS said the decision, made earlier this month but not previously publicized, was in line with an executive order that President Trump signed hours after his inauguration, giving agencies broad authority to lighten the burden of federal rules under the ACA.

The IRS confirmed the change on the same morning that Health and Human Services officials proposed a set of rules to help protect insurers and shore up ACA marketplaces in the short term while Republicans work on demolishing the law. The proposal drew swift praise from the insurance industry and condemnation from consumer advocates and congressional Democrats.

Imagine that.