Treasury Issues Rules on Employer Responsibility for Health Insurance

On December 28, the Treasury Department and the Internal Revenue Service (IRS) issued proposed regulations and questions-and-answers on the employer responsibility rules of the health reform law. The proposed regs are summarized here. The agencies also released questions-and-answers on the rules, intended to simplify and summarize the proposed regulation.

Generally, REG-138006-12 provides guidance on which employers must comply with the employer responsibility rules; to which employees they are required to offer affordable qualified health insurance; how to determine whether the coverage is affordable and qualified; how to calculate assessments; and, certain other administrative issues. The proposed reg also incorporates certain safe harbors and other interim rules contained in previously released Notices 2012-58, 2011-36, 2011-73 and 2012-17. These Notices provide guidance on how to determine whether an employee is full-time, and on basing measurements on self-only rather than family coverage.

The proposed regulation provides guidance on:

• How to measure “full-time” in order to determine which employees must be offered affordable qualified (minimum essential coverage, or MEC) health insurance
• How to determine if an employer is a large employer that will be subject to the requirement that it offer MEC
• How to calculate assessments if an employer will be subject to them for failure to offer MEC at all, or for the failure of its health insurance to be MEC and/or affordable
• How to determine if the MEC is affordable
• How to deal with certain administrative issues (such as how and when to pay assessments, comply with reporting requirements, etc.) 

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