IRS Proposed Regulations Regarding Minimum Value of Employer Plans and the Health Insurance Premium Tax Credit
On May 3, 2013, the IRS issued proposed regulations (the ?Ç£Regulations?Ç¥) regarding the health insurance premium tax credit (?Ç£Credit?Ç¥) enacted under PPACA and the determination of the minimum value of health coverage (?Ç£MV?Ç¥) provided by an eligible employer-sponsored plan (?Ç£Plan?Ç¥). Under PPACA, individuals generally cannot receive a Credit if they are eligible for coverage under a Plan that is ?Ç£affordable?Ç¥ and provides MV. Certain large employers may be subject to a penalty under PPACA?ÇÖs ?Ç£play or pay rule?Ç¥ if a full-time employee receives a Credit. A Plan fails to provide MV if the Plan?ÇÖs percentage share of the total allowed costs of benefits provided is less than 60 percent. The Regulations address the treatment of various benefit arrangements, including integrated health reimbursement arrangements and nondiscriminatory wellness programs, in the determination of a Plan?ÇÖs percentage cost share for MV purposes and the affordability of the Plan?ÇÖs coverage. Notably, with respect to… Continue Reading
On May 2, 2013, the Internal Revenue Service (the ?Ç£IRS?Ç¥) issued Revenue Procedure 2013-25, which set the annual limit on deductions permitted in 2014 for health savings accounts at $3,300 for individuals with self-only coverage under a high-deductible health plan and at $6,550 for individuals with family coverage under a high-deductible health plan. A high-deductible health plan for calendar year 2014 is a plan that has an annual deductible of at least $1,250 for self-only coverage or $2,500 for family coverage. Revenue Procedure 2013-25 can be found?áhere.
IRS Issues Voluntary Correction Program Submission Kit for Plan Sponsors Who Missed the Deadline to Adopt a Pre-Approved Defined Benefit Plan
Employers that maintained pre-approved defined benefit retirement plans generally were required to adopt a new plan document, on or before April 30, 2012, that incorporated changes required by EGTRRA. Employers that failed to meet this deadline may correct this failure by adopting a restated EGTRRA plan document and filing a submission for a Voluntary Correction Program (?Ç£VCP?Ç¥) compliance statement with the IRS in accordance with the submission kit, which guides plan sponsors through the steps in filing a submission for a VCP compliance statement for this adoption failure. If there are other plan failures, a submission using the kit?ÇÖs requirements will not correct the other failures. A copy of the kit can be found?áhere.
New FAQs Address Annual Limit Waivers, Provider Nondiscrimination, and Transparency Reporting under PPACA
The Departments of Labor, Health and Human Services, and Treasury (collectively, the ?Ç£Departments?Ç¥) recently released frequently asked questions (?Ç£FAQs?Ç¥) addressing the implementation of the annual limit waivers, provider nondiscrimination, and transparency reporting requirements under the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥). In the FAQs, the Departments first clarified that a change to a health plan or insurance policy year will not affect the expiration date of an annual limit waiver. For instance, if a waiver was granted for an April 1, 2013 plan or policy year, the waiver will expire on March 31, 2014, regardless of whether the plan or issuer later amends its plan or policy year. Next, the Departments announced that no regulations are forthcoming to address PPACA?ÇÖs provisions related to nondiscrimination against providers or coverage for individuals participating in approved clinical trials because the Departments considered such provisions to be self-implementing. Accordingly, non-grandfathered group health plans… Continue Reading