IRS Asks for Feedback on Employers’ Health Care Insurance Responsibilities

The Treasury Department and the Internal Revenue Service are asking for input from the public on a proposed safe harbor under the health care reform law that would make it easier for employers to determine whether the health insurance coverage they are offering to employees is considered “affordable.”

The proposed affordability safe harbor for employers would fall within the shared responsibility provisions included in the Affordable Care Act and would apply to certain employers starting in 2014. Under the Affordable Care Act, employers with 50 or more full-time employees that do not offer affordable health coverage to their full-time employees may be required to make a “shared responsibility payment.”

Notice 2011-73, posted Tuesday on IRS.gov, asks for public input and comment on a proposed safe harbor that would help employers decide whether the health coverage they offer is considered to be affordable.

The Treasury Department and the IRS plan to propose a safe harbor allowing employers that offer coverage to their employees to measure the affordability of that coverage by using wages that the employer paid to an employee, instead of the employee’s household income. This contemplated safe harbor would only apply for purposes of the employer shared responsibility provision, and would not affect employees’ eligibility for health insurance premium tax credits.

To submit comments, send an email to Notice.Comments@irscounsel.treas.gov and include “Notice 2011-73” in the subject line. The deadline for comments is Dec. 13, 2011.