A project of the George Washington University's Hirsh Health Law and Policy Program and the Robert Wood Johnson Foundation

Internal Revenue Service

IRS releases final rules on tax credit and drug fee

Posted on July 24, 2014

The Internal Revenue Service (IRS) published a final rule clarifying its premium tax credit policy for those enrolling in health plans through Affordable Insurance Exchanges with complicated family and household situations. The rule clarifies that certain married individuals, including spouses in abusive relationships, and divorced or separated taxpayers, can be considered not married for the purposes of the Internal Revenue Code, under Section 7703(b).

The agency also released a final rule regarding the implementation of the Affordable Care Act’s (ACA) branded prescription drug fee. The rule  provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs.

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Rule finalizes 90-day waiting limit

Posted on June 20, 2014

Today, the US Department of Health and Human Services (HHS), the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (EBSA) released a final rule concerning the 90-day waiting period limitation. The final rule states that group health insurance plans cannot apply a waiting period that exceeds 90 days after the employee has been approved for coverage. The rule further states that small group plan orientation periods, the time it takes from hire to when the plan deems the employee is eligible for coverage, cannot exceed one month.

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IRS Q&A clarifies employer payment plans

Posted on May 27, 2014

According to a Q&A document recently released by the Internal Revenue Service (IRS), employers that do not offer health insurance but reimburse premiums for employees that purchase private insurance may be hit with a financial penalty. The Q&A states that employers utilizing this approach are effectively creating employer payment plans, which are beholden to the same rules and requirements as other group health plans under the Affordable Care Act (ACA). The IRS states that this arrangement does not comply with the ACA market reforms, and offering this option to employees may result in a $100/day excise tax per applicable employee for the employer.

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IRS guidance aids victims of domestic violence

Posted on March 26, 2014

Guidance issued by the Internal Revenue Service (IRS) permits married individuals separated from their spouses due to domestic violence to receive income-based premium tax credits. Typically, spouses are expected to file taxes jointly in order to be eligible for premium subsidies under the Affordable Care Act (ACA). Today’s guidance allows for an exception to this rule and also extends the enrollment deadline for this population by two months, through May 31st.

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IRS issues new ACA-related rules

Posted on March 6, 2014

A final rule released by the Internal Revenue Service (IRS) addresses the reporting requirements for large employers under the Affordable Care Act (ACA). Beginning in 2015, employers with more than 50 full-time employees are required to offer quality and affordable insurance to their employees. The new rule provides a methodology designed to simplify and reduce the costs associated with the employer reporting requirements mandated under the ACA. Another final rule issued by the IRS describes how issuers of minimum essential coverage are expected to report information to the IRS on the type and duration of coverage.

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Tri-agency rules address 90-day waiting period limit

Posted on February 20, 2014

The US Department of Health and Human Services (HHS), the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (EBSA) released several rules today concerning the 90-day waiting period limitation before insurance coverage can become effective. The final rule states that group health insurance plans cannot apply a waiting period that exceeds 90 days beginning January 2015. The proposed rule clarifies the 90-day limitation in terms of the length of employment-based orientation periods, stating that one month is the reasonable limit for employment-based orientation periods.

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IRS rule addresses employer mandate, calculating teacher hours

Posted on February 11, 2014

A new rule issued by the Internal Revenue Service (IRS) addresses several components of the employer shared responsibility provisions within the Affordable Care Act (ACA). The rule further delays the employer shared responsibility payment for medium-sized businesses (50-100 employees) until 2016. Large employers will be able to phase in the percentage of full-time employees to whom they must provide health insurance, starting with 70% in 2015 and moving to 95% by 2016. IRS also released a fact sheet to accompany this rule. Additionally, this rule stated that teachers cannot be considered part-time employees because many do not work a full summer schedule.

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When Does Medicaid Coverage Amount to Minimum Essential Coverage Under the Affordable Care Act? An Update on the Treasury/IRS Rules Defining Minimum Essential Coverage

Posted on February 11, 2014

A January 27, 2014 proposed rule in the Federal Register (79 Fed. Reg. 4302-4308) published by Treasury/IRS would add further clarification to the question of under what circumstances the agencies will classify Medicaid as minimum essential coverage (MEC) for purposes of satisfying the Affordable Care Act’s requirement to maintain MEC or pay a shared responsibility tax. Comments are due by April 28, 2014; the agencies also intend to hold a public hearing on the NPRM which covers Medicaid as well as other types of coverage.

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IRS documents address minimum essential coverage

Posted on January 24, 2014

The Internal Revenue Service (IRS) released several documents concerning the maintenance of minimum essential coverage. The first document is a proposed rule issued concerning certain types of Medicaid coverage that do not satisfy the minimum essential coverage requirement under the Affordable Care Act (ACA). The proposed rule states that individuals with this coverage will not owe a shared responsibility payment. The proposed rule also outlines hardship exemptions and enrollment in employer-sponsored health insurance plans. In addition to the rule, the IRS released a notice stating that individuals with limited Medicaid coverage or limited coverage from military health benefits will not be subject to the individual shared responsibility payment.

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Update: Proposed IRS Procedures for Tax-Exempt Hospitals to Correct and Disclose Failures to Meet Their Community Benefit Obligations Under the Internal Revenue Code

Posted on January 13, 2014

In order to be exempt from federal income taxes, nonprofit hospitals seeking such a designation under the Internal Revenue Code must provide a community benefit, a policy that has been in place since 1969 but that has gone essentially unenforced since its creation by the Nixon Administration. Government estimates of the value of nonprofit hospital tax-exemption placed the total national value at more than $12 billion in 2002, a figure that undoubtedly has grown over the past decade and that reflects both federal tax losses and losses resulting from the fact that most states and localities use federal law to determine exemption from state and local property, sales, and income taxes…

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