Employee Benefits Compliance

IRS Issues Notice 2011-1, Delaying the Effective Date of Nondiscrimination Rules for Insured Group Health Plans

The IRS, as well as the Departments of Labor and Health and Human Services (collectively, the Departments), have determined that compliance with Health Care Reform nondiscrimination provisions (applicable to insured health plans) should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under PHS Act § 2716.

“In order to provide insured group health plan sponsors time to implement any changes required as a result of the regulations or other guidance, the Departments anticipate that theguidance will not apply until plan years beginning a specified period after issuance. Before the beginning of those plan years, an insured group health plan sponsor will not be required to file IRS Form 8928 with respect to excise taxes resulting from the incorporation of PHS Act § 2716 into § 9815 of the Code.”

Notice 2011-1 says this decision was made to delay the effective date “because regulatory guidance is essential to the operation of the statutory provisions.”

BenefitsLink.com just published IRS Notice 2011-1. You can access this 7-page Notice at http://benefitslink.com/IRS/notice2011-01.pdf