IRS Eases Deadline for Business Provided Health Insurance

Employers who are struggling to meet the federal deadline to add health insurance coverage for employees’ children starting next year, as required by the Affordable Care Act, would have more time to add the coverage without being fined under proposed rules being considered by the IRS.

The act requires employers with 50 or more full-time equivalent employees in 2013 to offer health insurance to employees and employees’ children starting in 2014. Employers with less than 50 employees are exempt from those rules.

In the recent proposed rules, the IRS acknowledged that a number of employers offer coverage only to their employees and not to employees’ dependents, which the act defines only as children, not spouses.

For these employers, expanding their health plans to add dependent coverage will require substantial revisions to their plans and to their procedures for administration of the plans, according to the IRS proposed rules. To provide employers sufficient time to implement these changes, it is appropriate to provide transition relief with respect to dependent coverage for plan years that begin in 2014.

Any employer “that takes steps” in the health plan year beginning in 2014 to satisfy the requirement that employers offer coverage to employees’ children will not be fined based solely on failure to offer coverage to employees’ children in the 2014 plan year, the proposed rules said.

An employer could still be fined for not offering health insurance at all next year, or offering a plan that is unaffordable (more than 9.5 percent of the employee’s wages from the employer as reported in box 1 of the W-2 form, according to the proposed rules.)

Final regulations will be issued later after all of the information from the public comment period and public hearing is reviewed.

Business taxpayers can rely on the proposed regulations to comply with the rules outlining employer penalties.

If the final regulations are more restrictive than the guidance in the proposed regulations, the final regulations will be applied prospectively, and employers will be given sufficient time to come into compliance with the final regulations.

When considering your needs for insurance products for your life, home or business consider contacting Bennett Insurance Group at 623-979-4140

Presented By:
Jim Bennett
Bennett Insurance Group
623-979-4140
http://jimbennettinsurance.com
jim@jimbennettinsurance.com