IRS Notice 2011-36 (posted May 3, 2011 on IRS.gov) solicits public input and comment on several issues under the Affordable Care Act (ACA, or Health Care Reform law) that will take effect in 2014. These provisons will be the subject of future proposed guidance by the Departments of Treasury, Labor, and Health and Human Services (the three Departments jointly responsible for implementation and enforcement of the Health Care Reform law). In particular, the notice requests comments on:
- Possible approaches the Treasury and IRS could take in issuing rules to implement the “shared responsibility” requirements under Health Care Reform law. This provision applies to “applicable large employers” who do not offer “affordable” health coverage to all full-time employees. (This is often dubbed the “pay or play” provision.)
- How to define “full-time employee” for purposes of determining whether or not an employer is an “applicable large employer” and also for determining those employees for whom the employer must pay part of the premium. The Notice describes a possible alternative the Departments are considering to a month-by-month determination of full-time employee status. Under the proposed alternative, employers could elect to use a look-back/stability period safe harbor rather than a month-by-month determination.
- How the three Departments should coordinate their approaches to interpret and apply the HCR provisions limiting the allowable waiting period for health coverage to no longer than 90 days.
- How guidance under the 90-day waiting period provisions should be coordinated with the rules Treasury and IRS will propose regarding the shared responsibility provisions.
Both provisions will take effect in 2014. The shared responsibility provision will apply to “applicable large employers” (defined as those who employed an average of 50 or more full-time employees on business days in the preceding calendar year) that do not offer “affordable” health coverage to their full-time employees. The HCR law specifically exempts small employers that have fewer than 50 full-time employees. The 90-day waiting period provision will apply to all plans in 2014.
It is not necessary to take any action in response to Notice 2011-36, and most employers will not. However, employers who will or might be “applicable large employers” may want to read the Notice, to understand how the government is currently proposing to define “applicable large employer” and “full-time employee.” Additionally, the following types of employers may want to apply the proposed methods to their current workforce numbers, and may even want to submit comments: employers who are PEOs, and employers who have employees likely to average more than 30 hours per week some months and less than 30 hours per week other months. Employers may want to check with their industry associations or trade organizations to see if they are submitting comments on behalf of employers in that industry.
The deadline for submitting comments is June 17, 2011. A number of employers and stakeholders have already asked IRS for guidance on the shared responsibility provision and also have provided information and initial suggestions. If you wish to submit comments, the Notice provides the following three ways to do so:
- E-mail to: Notice.Comments@irscounsel.treas.gov. Include “Notice 2011-36” in the subject line.
- Mail to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2011-36), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
- Hand deliver to: CC:PA:LPD:PR (Notice 2011-36), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.