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Agencies Issue Requests for Comments on Determining Minimum Value of an Employer Plan, Reporting Requirements, and Verification of Access to Employer Coverage

The Internal Revenue Service (IRS) on April 26, 2012, issued three notices regarding approaches to determining whether an employer-sponsored health plan provides minimum value and associated reporting requirements as added by the Patient Protection and Affordable Care Act (Affordable Care Act).

Notice 2012-31 describes and requests comments on several possible approaches to determining whether health coverage under an eligible employer-sponsored plan provides “minimum value.” “Minimum value” is important to employers because it is one of the factors that determines whether or not an employer is required to pay an “assessable payment.” The “assessable payment” is a penalty or tax that applies to most large employers if any full-time employee (FTE) receives a premium tax credit from the government to assist in purchasing health coverage through a state-based Affordable Insurance Exchange (Exchange). An FTE is not eligible for a premium tax credit unless the employer-sponsored plan’s coverage is either: 1) unaffordable; or 2) does not provide minimum value. It is this second requirement that Notice 2012-31 addresses.

Notice 2012-32 requests comments on Code Section 6055, which requires health insurance issuers, sponsors of self-insured health plans, and government-sponsored health insurance programs that provide minimum essential coverage to file annual returns reporting information for each individual for whom minimum essential coverage is provided.

Notice 2012-33 requests comments on Code Section 6056, which requires reporting for applicable large employers that are subject to the employer shared responsibility payment under Code Section 4980H.

Separately, the Department of Health and Human Services’ (HHS) Center for Consumer Information & Insurance Oversight (CCIIO) released a request for comments on verifying access to employer-sponsored health coverage for purposes of determining eligibility for advance payments of the premium tax credit in an Exchange. The bulletin requests comments on a proposed interim strategy and potential regulatory approach for verification of an applicant’s access to qualifying coverage in an employer-sponsored plan. HHS also solicits comments on the development of a long-term verification strategy.

Comments on the three IRS notices are due June 11, 2012. There is no specified comment due date for the CCIIO bulletin.

The Aon Hewitt bulletin below provides a summary of the IRS notices and the CCIIO request for comment.

Agencies Issue Requests for Comments on Determining Minimum Value of an Employer Plan, Reporting Requirements, and Verification of Access to Employer Coverage