• IRS Issues Game-Changing Regulations Interpreting Health Care Reform’s Pay or Play Requirement
  • February 7, 2013 | Authors: Ashley Gillihan; John R. Hickman; Bernard Taylor
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • Beginning in 2014, “applicable large employers” become subject to new rules prescribed in Internal Revenue Code Section 4980H (“4980H Rules”), which were added by the Patient Protection and Affordable Care Act (ACA). These new 4980H Rules impose a confiscatory excise tax on employers who fail to offer certain coverage to full-time employees if at least one full-time employee receives a premium tax credit or cost share reduction (“Premium Subsidy”) for coverage in an “Exchange” established pursuant to the new ACA rules. These new 4980H Rules are often referred to as the “employer shared responsibility requirements” or the “pay or play” requirements. Now, less than a year before these game-changing rules go into effect, the IRS has issued comprehensive proposed regulations (the “Proposed Rules”) that give much-needed substance to the new rules. The IRS also issued a set of FAQs that helps make the otherwise complex Proposed Rules more palatable.