Health & Welfare Plans Newsletter

BULLETIN
Supplement to
September 18, 2014

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[Official Guidance]

Text of IRS Notice 2014-49: Shared Responsibility for Employers Regarding Health Coverage -- Approach to Changes in Measurement Periods or Methods Applicable to an Employee (PDF)
"This notice describes a proposed approach to the application of the look-back measurement method, which may be used to determine if an employee is a full-time employee for purposes of Section  4980H of the Internal Revenue Code, in situations in which the measurement period applicable to an employee changes. This change may occur because the employee transfers within the same applicable large employer (or within the same applicable large employer member (ALE member)) from a position to which one measurement period applies to a position to which a different measurement period applies. This situation may also arise when the ALE member modifies the measurement period applicable to a position. This notice is intended to address the topics for which guidance was anticipated in section VII.G of the preamble to the final Section  4980H regulations [issued Feb. 12, 2014]. The Treasury Department and the IRS invite comments on this proposed approach. However, taxpayers may rely on the approach proposed in this notice until further guidance is issued, and in any case through the end of the 2016 calendar year." (Internal Revenue Service [IRS])  

[Official Guidance]

Text of IRS Notice 2014-55: Additional Permitted Election Changes for Health Coverage Under Section 125 Cafeteria Plans (PDF)
6 pages. "[T]his notice addresses two specific situations in which a cafeteria plan participant may wish to revoke, during a period of coverage (commonly a plan year), the employee' s election for employer-sponsored health coverage under the cafeteria plan in order to purchase a Qualified Health Plan through a competitive marketplace established under [the ACA] ... The first situation involves a participating employee whose hours of service are reduced so that the employee is expected to average less than 30 hours of service per week but for whom the reduction does not affect the eligibility for coverage under the employer's group health plan. (This may occur, for example, under certain employer plan designs intended to avoid any potential assessable payment under Section 4980H of the Internal Revenue Code.) The second situation involves an employee participating in an employer's group health plan who would like to cease coverage under the group health plan and purchase coverage through a Marketplace without that resulting either in a period of duplicate coverage under the employer's group health plan and the coverage purchased through a Marketplace or in a period of no coverage. This notice permits a cafeteria plan to allow an employee to revoke his or her election under the cafeteria plan for coverage under the employer' s group health plan (other than a flexible spending arrangement (FSA)) during a period of coverage in each of those situations provided specified conditions are met. The Treasury Department and the IRS intend to modify the regulations under Section 125 consistent with the provisions of this notice, but taxpayers may rely on this notice immediately." (Internal Revenue Service [IRS])  

[Official Guidance]

Text of IRS Notice 2014-56: Adjusted Applicable Dollar Amount for PCORI Fee (PDF)
"This notice provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of the fee imposed by Sections 4375 and 4376 of the Internal Revenue Code for policy years and plan years that end on or after October 1, 2014, and before October 1, 2015. This notice also provides that the adjusted applicable dollar amount for policy years and plan years that end on or after October 1, 2015, will be published in guidance of general applicability published in the Internal Revenue Bulletin.... Based on the percentage increase in the projected per capita amount of the National Health Expenditures published by HHS on September 3, 2014, the applicable dollar amount that must be used to calculate the fee imposed by Sections 4375 and 4376 for policy years and plan years that end on or after October 1, 2014, and before October 1, 2015, is $2.08." (Internal Revenue Service [IRS])  

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