IRS/Treasury Issue Employer Shared Responsibly Proposed Regulations


Beginning in 2014, the Patient Protection and Affordable Care Act (Act) requires “applicable large employers” (i.e., employers with 50 or more full-time equivalent employees) to either offer group health insurance coverage to their full-time employees or (potentially) pay a fine. Referred to as “Employer Shared Responsibility” or “pay-or-play” requirements, these rules are set out in new Internal Revenue Code § 4980H. In a notice of proposed rulemaking issued December 28, 2012 (the “proposed regulations”), the Treasury Department and the IRS offered a set of comprehensive rules that address Code § 4980H compliance. This client advisory explains the key features of the proposed regulations.

Summary of Important Provisions -

The proposed regulations include a series of clarifications and new rules that are generally employer-friendly. This is not to say that compliance will be a simple matter; it will not. The statutory scheme is too complex for that. Nevertheless, in a handful of instances, the proposed regulations adopted common sense rules that smooth over some of the Act’s rougher edges. These include...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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