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IRS Notice on Health Insurance
Notice Notice 2015-17 on Guidance on the Application of Code §4980D to Certain Types of Health Coverage Reimbursement Arrangements
This notice reiterates the conclusion in previous guidance addressing employer payment plans, including Notice 2013-54, 2013-40 I.R.B. 287,1 that employer payment plans are group health plans that will fail to comply with the market reforms that apply to group health plans under the Affordable Care Act (ACA).2 For this purpose, an employer payment plan as described in Notice 2013-54 refers to a group health plan under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy or directly pays a premium for an individual health insurance policy covering the employee, such as arrangements described in Revenue Ruling 61-146, 1961-2 C.B. 25. This notice also provides transition relief from the assessment of excise tax under Internal Revenue Code (Code) § 4980D for failure to satisfy market reforms in certain circumstances. The transition relief applies to employer healthcare arrangements that constitute (1) employer payment plans, as described in Notice 2013-54, if the plan is sponsored by an employer that is not an Applicable Large Employer (ALE) under Code § 4980H(c)(2) and §§54.4980H1(a)(4) and -2; (2) S corporation healthcare arrangements for 2-percent shareholderemployees; (3) Medicare premium reimbursement arrangements; and (4) TRICARErelated health reimbursement arrangements (HRAs). This notice also provides additional guidance on the tax treatment of employer payment plans. This notice supplements and clarifies the guidance provided in Notice 2013-54 and other guidance in response to comments and questions from taxpayers and stakeholder groups about certain aspects of that guidance. The United States Department of Labor (DOL) and the United States Department of Health and Human Services (HHS) (collectively with the Treasury Department and the IRS, the Departments) have reviewed this notice and have advised the Treasury Department and the IRS that they agree with the guidance provided in this notice. The Treasury Department and the IRS anticipate that clarifications regarding other aspects of employer payment plans and HRAs will be provided in the near future. This notice is intended to provide further clarification of the guidance provided in Notice 2013-54 and other guidance and is intended to be read in conjunction with that guidance.