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Under the Patient Protection and Affordable Care Act (the "Act"), insured group health plans were to be subject to nondiscrimination requirements, effective with their first plan year beginning after September 23, 2010, i.e., January 1, 2011 for calendar-year plans. On December 22, 2010, however, the Internal Revenue Service issued Notice 2011-1, stating that insured plans will not have to comply with the new nondiscrimination requirements until further guidance is issued. According to the IRS, comments that were received regarding the applicability of requirements "similar to" portions of Section 105(h) of the Internal Revenue Code to insured plans led the three agencies responsible for implementing the Act – the Departments of Treasury, Labor and Health and Human Services – to decide to delay enforcement of the nondiscrimination provisions until additional regulatory guidance can be issued.
The IRS also noted that there were fundamental concerns about plan sponsors' ability to comply with the new law without further guidance, and requested that further public comments on a number of areas of concern be submitted by March 11, 2011. Specifically, the IRS asked for comments about thirteen concerns that additional guidance should address, including the following:
If you have any questions about the effective date or any other aspects of the new nondiscrimination tests, please contact one of the members of the Employee Benefits Group or the author of this Legal Alert, Jeffrey Ashendorf, at email@example.com.