Compensation & Benefits Library™ gives you accurate answers and practical guidance to help you design, analyze, compare, administer, and communicate compensation and benefits programs...
Oct. 20 — The IRS and Treasury Department have quite a few big ticket items on their agenda, but they're also working on a regulatory “pot luck” of sorts, involving smaller changes to Affordable Care Act regulations, agency officials said.
One such regulation has to do with squaring the employer shared-responsibility regulations under tax code Section 4980H with Internal Revenue Service guidance released in 2014 that indexed calculations on whether an employer's offer of health-care coverage is affordable to employees, Kathryn Johnson, an attorney adviser with the Treasury Department's Office of Benefits Tax Counsel, said Oct. 20. Johnson and others spoke at a conference sponsored by the American Bar Association Joint Committee on Employee Benefits.
Employees are only eligible for a premium tax credit if their employer's offer of coverage is more than 9.5 percent of household income, she said. Revenue procedures 2014-37 and 2014-62 adjusted that number for 2015 and 2016, but the final rules under Section 4980H don't include room for adjustments, she said.
All this really means is that every instance in the 4980H regulations that reference 9.5 percent need to be changed to say 9.5 percent “as indexed,” said Stephen B. Tackney, deputy associate chief counsel in the IRS's Office of Chief Counsel.
Johnson said the IRS intends to issue guidance to provide “clarity.”
Comments are due Nov. 2 on the IRS's proposed rules that would prevent employers from not offering in-patient hospitalization or physician services if they want to continue to meet the ACA's minimum value standard.
Under the proposed rules, eligible employer-sponsored health plans will be considered to provide minimum value coverage only if the plan's share of total allowed costs of benefits provided to an employee is at least 60 percent and the plan includes substantial coverage of inpatient hospital and physician services.
The Department of Health and Human Services “has already proposed and finalized their related regulations. So I would imagine our final regulations on this would close the loop” on the issue, Johnson said.
Tackney added that employers shouldn't look at the guidance as setting out the “absolute, bare minimum that you have to provide.”
“I don't know if a lot of people are thinking that way. I'm just not sure that's the most productive way to think about this issue,” Tackney said.
For more information, see Compensation and Benefits Library’s Tax Aspects of Health Plans Under the Affordable Care Act chapter.
To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at email@example.com
To contact the editor responsible for this story: Jo-el J. Meyer at firstname.lastname@example.org
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)