Litigation

IRS delays non-discrimination requirements for insured health plans

By John Walch

One of the many changes resulting from the Patient Protection and Affordable Care Act is that non-discrimination rules applicable to self-insured health plans for many years are to be extended to insured arrangements effective for plan years beginning after September 22, 2010.  However, the Act did not just add "insured health plans" to those rules.  No, the Act says that insured plans must comply with rules similar to those applied to self-insured plans.  And, since the IRS has not issued any regulations explaining which parts of the rules will be applied the same way and which ones won't, how are insured plans supposed to avoid the excise tax penalties and other sanctions imposed by the Act?

Fortunately, the IRS has issued Notice 2011-1 which delays compliance with the non-discrimination rules until regulations are issued related to this provision of the Act.  The Notice also solicits input on several topics regarding how the IRS should implement the statutory mandate, and provides that the other agencies potentially affected (Labor, HHS and Treasury) have all agreed with the IRS position. 

Full post as published by Northwest Business Litigation Blog on December 23, 2010 (boomark / email).