Write the Rules on Employer Health Care Reform Penalties

Employers now have an opportunity to influence how the Patient Protection and Affordable Care Act’s “employer responsibility” “assessable payment” will apply in 2014. 


Section 4980H of the Internal Revenue Code, added by the PPACA, imposes a penalty on employers with more than 50 full-time employees if at least one full-time employee obtains subsidized “exchange” health coverage and the employer does not offer its full-time employees group health plan coverage or the coverage offered fails the PPACA’s affordability or value tests. 


The Internal Revenue Service issued Notice 2011-36 on May 3, inviting public comments on approaches the IRS is considering for regulations implementing the employer-penalty provision, as well as other PPACA provisions.  The Notice suggests potential approaches for, among other things, determining which employees are “full-time.”  It also invites comments on the interpretation of the 90-day limitation on group health plan eligibility waiting periods and coordination of that provision with the employer-penalty provision.


Comments from employers and employer groups have helped shape the legal and regulatory landscape that affects them.  Despite the PPACA’s primary enforcement agencies’ tendency, so far, to issue final regulations without a public comment opportunity, employer groups already have had significant influence on the curtailment and delay of certain regulations.  (For example, the IRS’ decision to delay enforcement of the new nondiscrimination provisions for insured group health plans.)  Also, employers and employer groups influenced Congress’ decision to repeal the PPACA’s “free choice voucher” provisions, which would have required employers to pay for certain employees’ health exchange coverage. 


Here’s an opportunity for employers and employer groups to voice their opinions on a significant regulation.  Our Government Relations practice regularly assists employers and employer groups to prepare comments on proposed regulations. It can pay to speak up!