IRS Previews Employer PPACA Regs

Regulators at the Internal Revenue Service (IRS), an arm of the Treasury Department, have suggested that they may create a safe harbor that would let an employer satisfy the requirement if the employee’s share of the cost of individual coverage is less than 9.5% of that employee’s W-2 wages from that employer.

Employers and plan administrators contend that any other safe harbor would be difficult to administer. 

Some have suggested that employers might cope with the requirement by making individual coverage inexpensive but pushing the employee’s share of the cost of family coverage sky high.

The IRS and the Treasury Department still plan to issue guidance permitting employers to use an employee’s W-2 wages as a safe harbor in determining the affordability of employer coverage, EBSA officials say in the technical release.

EBSA officials also talk about upcoming guidance relating to definitions, such as how an employer will determine whether a worker is a full-time worker, and when.

The group coverage mandate, or “employer shared responsibility provisions,” are supposed to apply to an employer with 50 or more full-time equivalent employees.

The IRS is thinking about creating a “look-back/stability period safe harbor” method that employers can use to decide whether current employees are full-time employees, EBSA officials say.

“Comments were also requested on potential rules for determining full-time status of new employees and employees who move into full-time status mid-year,” officials say.

EBSA officials give several examples of the approach employers might use to determine whether a newly-hired employee is a full-time employee.