ACA COMPLIANCE BULLETIN: PROPOSED RULE ON THE IMPACT OF ICHRAs ON THE ACA’S PAY OR PLAY RULES

New Compliance Update.
OVERVIEW

Beginning Jan. 1, 2020, some employers will be able to offer individual coverage HRAs (ICHRAs) to help employees pay for individual health insurance. ICHRAs were established by a final rule published on June 20, 2019, which raised questions about how existing federal rules will apply to ICHRAs.

As a result, on Sept. 30, 2019, the Internal Revenue Service (IRS) published proposed regulations on how the following federal requirements will affect ICHRAs:

  • The Section 4980H employer shared responsibility rules under the Affordable Care Act (ACA); and
  • The federal nondiscrimination requirements in Internal Revenue Code (Code) Section 105(h).
ACTION STEPS

Taxpayers generally may rely on the guidance provided in the proposed rule prior to a final rule being issued. Comments on the proposed rule will be accepted until Dec. 30, 2019.

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