IRS Seeking Public's Help in Finalizing Certain Employer Affordable Care Act Regulations

The Department of the Treasury and the IRS are requesting public comments on issues related to the shared responsibility provisions in the Patient Protection and Affordable Care Act (Affordable Care Act) that will apply to certain employers starting in 2014 [IR 2011-50; Notice 2011-36, 2011-21 IRB].

Under the Affordable Care Act (see Code Sec. 4980H(a)), employers with 50 or more full-time employees (“applicable large employers”) that do not offer affordable health care coverage to their full-time employees may be required to make a shared responsibility payment. The law specifically exempts small firms that have fewer than 50 full-time employees.

The Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (collectively, the Departments) are working in concert to develop regulations and other administrative guidance in this area. They seek public input before finalizing the regulations and administrative guidance. The Departments are particularly interested in developing methodology that employers may use to determine who is a full-time employee. Code Sec. 4980H(c)(4) defines a “full-time employee,” with respect to any month, as an employee who is employed on average for at least 30 hours of service per week.

Notice 2011-36, 2011-21 IRB, invites public comments on a number of possible rules, definitions, and approaches for interpreting and applying Code Sec. 4980H. Section III of the notice addresses potential definitions of employer, employee, and hours of service. Section IV of the notice describes a possible method for determining whether an employer is an applicable large employer for a calendar year, and therefore subject to Code Sec. 4980H. Section V of the notice outlines possible rules that could be used to determine an employee's full-time status for purposes of calculating an employer's assessable payment under Code Sec. 4980H. Section VI of the notice contains a more general request for comments, including comments on the interaction of the rules under Code Sec. 4980H with certain other provisions in the Affordable Care Act.

The deadline for submitting comments is June 17, 2011.