Nondiscrimination rules health insurance $100/day penalty

[ttbtaxes]

The IRS delayed implementation of the rules that require an employer to provide health insurance on a nondiscrimination basis. There was a $100/day per employee penalty associated with violation of the nondiscrimination rule.

Does anyone know when compliance must take place?

[TaxGuyBill]

It's "until after regulations or other administrative guidance of general applicability has been issued under § 2716". The ACA discrimination policy does not apply at all to self-insured plans.

http://www.irs.gov/pub/irs-drop/n-11-01.pdf

However, there probably are discrimination rules under ERISA that may apply.

[Maribeth]

I thought the relief was only through June 30, 2015. After that, they "may' assess penalties.

The relief for s-corp shareholders is open ended.

[TaxGuyBill]

I thought the relief was only through June 30, 2015. After that, they "may' assess penalties.

The relief for s-corp shareholders is open ended.

That is the penalty relief for an employer that reimburses personal health insurance premiums. That one doesn't discuss discrimination.

http://www.irs.gov/pub/irs-drop/n-15-17.pdf

[ttbtaxes]

I read Notice 2011-1 which does provide relief. Until regulations are finalized, does that mean you CAN discriminate without penalty?

[TaxGuyBill]

I read Notice 2011-1 which does provide relief. Until regulations are finalized, does that mean you CAN discriminate without penalty?

For ACA purposes, yes.

For ERISA purposes, I don't know. I would guess you can NOT discriminate, but I don't know the ERISA rules.

[ttbtaxes]

For ACA purposes, yes.

For ERISA purposes, I don't know. I would guess you can NOT discriminate, but I don't know the ERISA rules.

How does this fall within the tentacles of ERISA? The ACA penalties are $100/day per person. What type of penalties are we talking about for ERISA purposes?

[TaxGuyBill]

How does this fall within the tentacles of ERISA? The ACA penalties are $100/day per person. What type of penalties are we talking about for ERISA purposes?

Unfortunately, I don't know much about ERISA, just that it has a bunch of rule about health and retirement plans. I do know it has non-discrimination rules, but I don't know the details or the penalties.

http://www.dol.gov/dol/topic/health-plans/

http://www.dol.gov/dol/topic/health-plans/erisa.htm

[ttbtaxes]

Good catch Bill. I had no idea that ERISA had any purview over health plans. You learn something new every day.