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IRS delays enforcement of non-discrimination requirements for insured health plans
By Jim Prince
Effective for Plan Years which begin after September 23, 2010, the Patient Protection and Affordable Care Act (the “Patient Protection Act”) prohibits non-grandfathered health plans from discriminating in favor of highly compensated employees and imposes a $100 per day per participant penalty on plans that discriminate. However, in Notice 2011-1 the IRS has delayed the application of the non-discrimination provisions of the Patient Protection Act until after regulations or other administrative guidance of general applicability have been issued. Notice 2011-1 also indicates that the penalty for failure to comply with the non-discrimination provisions will also not apply until the required regulatory guidance is issued.
Employers with non-grandfathered, fully insured health plans should consider whether changes in their plans which are contemplated in response to the non-discrimination requirements are necessary.
For additional information, please contact any member of McAfee & Taft’s Employee Benefits Group.
