The HR & Payroll Resource Center is your integrated, comprehensive source for HR and Payroll information that merges news, analysis, and guidance – including custom answers,...
By Kristen Ricaurte Knebel
Dec. 16 — Rules on whether employer-provided health-care coverage meets affordability and minimum-value standards under the Affordable Care Act—and therefore whether workers are eligible for tax credits to help purchase coverage in the ACA exchanges—were finalized by the federal government.
The final regulations, released by the Treasury Department and Internal Revenue Service on Dec. 16, address issues such as the definition of taxpayers' modified adjusted gross income, employer wellness program incentives, employer contributions to health reimbursement arrangements and cafeteria plans, and post-employment coverage.
The final rules retain the proposed change to the definition of modified adjusted gross income, saying the proposed regulations “clarified that when a parent makes an election under section 1(g)(7), household income includes the child's gross income included on the parent's return only.”
For wellness program incentives, the final rules retain the stance from the proposed rules that “wellness incentives unrelated to tobacco use are treated as unearned and wellness incentives related to tobacco use are treated as earned in determining affordability,” the IRS said.
The final rules (T.D. 9745; RIN 1545-BL43) apply to taxable years that end in 2014 or later, the IRS said.
Also on Dec. 16, the IRS issued guidance that aims to answer various questions related to the ACA.
In what is probably a response to many concerns about the upcoming ACA filing deadline, Notice 2015-87 reiterates that the IRS and Treasury have provided some relief for reporting under tax code Section 6056 related to coverage offered in the 2015 calendar year.
“The IRS will not impose penalties” under sections 6721 and 6722 for applicable large employers “that can show that they have made good faith efforts to comply with the information reporting requirements,” the notice said.
The notice also addresses previous IRS guidance from Notice 2013-54, which elaborated upon the application of certain provisions of the ACA to health reimbursement arrangements, flexible savings accounts and other employer-sponsored health-care arrangements.
The new notice also clarifies some areas of the employer shared-responsibility provisions, “including the identification of employee contributions when employers offer HRAs, flex credits, opt-out payments, or fringe benefit payments required under the McNamara-O'Hara Service Contract Act or other similar laws,” the IRS said.
The notice also addresses the application of the 9.5 percent affordability threshold for employer-provided health-care coverage to the safe harbor provisions under the employer mandate, and the employer status of certain entities for the purposes of the mandate, the IRS said.
The IRS and Treasury solicited comments on several parts of the notice, saying they plan to incorporate some of the notice's guidance into forthcoming proposed regulations. Comments on those questions are due by Feb. 18.
Notice 2015-87 supplements several pieces of guidance, including Notice 2013-54 and the 22nd set of frequently-asked-questions and answers on ACA implementation.
Except where stated, the notice's guidance is applicable for plan years beginning on or after Dec. 16.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)