IRS issues RFC on potential safe harbor for large employers

Posted on September 15, 2011 | No Comments
Filed under Department of the Treasury, Health Insurance, Internal Revenue Service, Key Developments, Rulemaking, Rules, and Guidance, Tax Policy

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Implementation Briefs

The Internal Revenue Service (IRS) has released a Request for Comment (RFC) on a potential safe harbor for large employers under the shared responsibility provisions of the Affordable Care Act (ACA). Under the ACA, employers with more than 50 employees must provide affordable health coverage to workers, or else face a penalty. This potential safe harbor would allow employers to base what constitutes affordable coverage on an employee’s wages rather than the employee’s household income, which is something more difficult for employers to know or easily determine.

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HHS and IRS release NPRMs on exchange eligibility, tax credits, medicaid expansion

August 12, 2011

The U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) have released Notices of Proposed Rulemaking (NPRM) on Exchange eligibility and insurance premium tax credits, respectively. Additionally, the Centers for Medicare and Medicaid Services (CMS) has released an NPRM related to the Medicaid eligibility expansion authorized by the Affordable Care Act (ACA). All three NPRMs are designed to simplify Exchange eligibility and enrollment by coordinating with state Medicaid agencies and the IRS to determine eligibility for premium tax credits and Medicaid under the new expanded eligibility rules laid out in the ACA. Also addressed in the proposed rules is the eligibility and calculation of tax credits for small businesses. For more information on the Medicaid eligibility expansion, click here. For more information on tax credits, click here. For more information on Exchange eligibility, click here. Finally, for more information on tax credits for small businesses, click here.

Update: Repeal of Free Choice Voucher Provisions

August 4, 2011

As discussed in the GPS Health Reform Overview, the Affordable Care Act (ACA) imposes penalties on large employers who do not offer affordable insurance to their employees if those employees receive subsidies to purchase insurance elsewhere. For certain employees, the ACA required employers to provide a voucher for purchase of insurance through a state Health Insurance Exchange. However, this “Free Choice Voucher” requirement was repealed on April 15, 2011, as part of an appropriations bill.

Update: Repeal of 1099 Reporting Requirement

July 28, 2011

Section 9006 of the Affordable Care Act (ACA) would have required businesses to issue 1099 forms for transactions over $600 with other corporations, such as vendors and suppliers. This was a significant expansion of the reporting requirements and was seen by many as a huge burden on businesses, particularly small businesses. On April 14, 2011, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 was signed into law, repealing the ACA Section 9006 reporting requirements.

Essential Health Benefits: Overview of the Department of Labor Report on Benefits Offered Under a “Typical” Employer Health Plan

May 11, 2011

The Affordable Care Act (ACA) requires that all health insurance issuers offering products in the individual and small-group markets, including both the state Exchange market as well as the non-Exchange market, provide coverage of certain “essential health benefits.” An earlier Implementation Brief explored the concept of “essential health benefits.” This Brief summarizes a new U.S. Department of Labor (DOL) report on benefits covered in a “typical” employer plan and identifies key implementation issues for the federal Department of Health and Human Services (HHS).