Last Friday the IRS released additional proposed regulations implementing the minimum value requirement for coverage sponsored by employers with 50 or more FTEs. The proposed rules provide that amounts contributed by employers to health savings accounts and integrated health reimbursement arrangements will be considered when determining whether a plan meets the minimum value requirement. The proposed rules do not define what an “integrated” HRA is; however, the IRS indicates further guidance on this issue is expected. Wellness incentives relating to preventing or reducing tobacco usage are also considered when determining whether the plan meets the minimum value criteria; however, other wellness incentives are not.
The IRS commentary also indicates there will be no de minimis exception for employers who fail to offer a minimum value health plan. Therefore, large employers subject to the play or pay rules will need to make sure their plan designs meet the minimum value criteria if they wish to avoid penalties.