The IRS today released an advance copy of Notice 2011-36 which requests comments on a number of possible rules, definitions and approaches for interpreting and applying section 4980H—the “shared responsibility” provisions as added to the Code by the health care reform legislation of March 2010 (generally providing that an applicable large employer having 50 or more full-time employees must offer affordable health care coverage or be required to make a shared responsibility payment).
Comments must be submitted by June 17, 2011, and are to include a reference to Notice 2011-36.
For an electronic version of today’s notice:
The health care reform legislation (enacted in March 2010) provides that employers with 50 or more full-time employees that do not offer affordable health coverage to their full-time employees may be required to make a shared responsibility payment. The law specifically exempts small firms that have fewer than 50 full-time employees.
This provision is effective for months beginning after December 31, 2013.
Notice 2011-36: Request for Comments
Notice 2011-36 solicits public input and comments on several issues that will be the subject of future proposed guidance, which Treasury and the IRS intend to provide for employers on how to comply with the shared responsibility provisions.
Specifically, Notice 2011-36 requests comments concerning:
- Potential definitions of employer, employee and hours of service
- A possible method for determining whether an employer is an applicable large employer for a calendar year, and thereby subject to section 4980H
- Possible rules that could be used to determine an employee’s full-time status for purposes of calculating an employer’s assessable payment under section 4980H
- The interaction of the rules under section 4980H with certain other provisions of the 2010 health care reform legislation
According to a related IRS release (IR-2011-50, May 3, 2011), the request for comments is designed so that Treasury and the IRS can continue to receive “broad input from stakeholders” on how best to implement the shared responsibility provisions in a way that is “workable and administrable for employers, allowing them flexibility and minimizing burdens.”
The related IRS release notes that employers have asked for guidance on the shared responsibility provision, and that a number of stakeholder groups have approached Treasury and IRS with information and initial suggestions, which have been taken into account in developing today’s notice. The intention of Treasury and the IRS is to afford all interested parties an opportunity to provide input before proposed regulations are issued at a later date.
The IRS release further reports that the departments of the Treasury, Labor, and Health and Human Services are working together to develop regulations and other guidance under the health care reform law, and Notice 2011-36 also asks for comments as to how these government departments are to interpret and apply the provisions limiting the ability of plans and issuers to impose a waiting period for health coverage of longer than 90 days starting in 2014.
Notice 2011-36 also invites comments on how guidance under the 90-day provisions is to be coordinated with the rules Treasury and IRS will propose regarding the shared responsibility provisions.
Notice 2011-36 will appear in Internal Revenue Bulletin 2011-21, dated May 23, 2011.
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