This Article Authored by McAfee & Taft Attorney: Jim Prince.

Effective for Plan Years which begin after September 23, 2010, the Patient Protection and Affordable Care Act (the "Patient Protection Act") prohibits non-grandfathered health plans from discriminating in favor of highly compensated employees and imposes a $100 per day per participant penalty on plans that discriminate. However, in Notice 2011-1 the IRS has delayed the application of the non-discrimination provisions of the Patient Protection Act until after regulations or other administrative guidance of general applicability have been issued. Notice 2011-1 also indicates that the penalty for failure to comply with the non-discrimination provisions will also not apply until the required regulatory guidance is issued.