Discriminatory Health Plans Will Be Subject To Significant Penalty Taxes


The Health Reform Acts enacted earlier this year impose a $100 per day per participant penalty tax on group health plans discriminating in favor of “highly compensated individuals.” These penalties apply with respect to plan years commencing on or after September 23, 2010. Many group health plans use the calendar year as their plan year and for such plans these penalties would begin to apply for the calendar/plan year commencing on January 1, 2011.

Edward J. Rayner, Christopher J. Sues and Matthew O. Young of Pryor Cashman’s Executive Compensation, ERISA and Employee Benefits Group have written an informative Legal Update about these penalties entitled Discriminatory Health Plans Will Be Subject To Significant Penalty Taxes.

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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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