March 14, 2016

The Internal Revenue Services (IRS) recently released Notice 2015-87, which clarified a number of ACA rules for employer-provided coverage, including employer shared responsibility penalties and ACA market reforms.




Significantly, the notice addressed how certain plan features, such as flex credits and opt-out incentives, affect whether an applicable large employer’s coverage is affordable.


In the notice, the IRS clarified that the adjusted affordability threshold (9.56 percent for 2015 and 9.66 percent for 2016) applies for the affordability safe harbors for these employers.


The IRS also confirmed the adjusted employer shared responsibility penalty amounts ($2,080 and $3,120 for 2015 and $2,160 and $3,240 for 2016). The IRS anticipates that adjustments for future years will be posted on the IRS’ website.


The notice also supplemented previous guidance on health reimbursement arrangements (HRAs) and employer payment plans. For more information, the notice can be viewed in its entirety here.

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