The IRS, Treasury Department, and the Departments of Labor (DOL) and Health and Human Services (HHS) have determined additional guidance is needed for the provision of the Affordable Care Act (ACA) that bars discrimination in favor of the highly compensated. Until additional guidance is issued, insured group heath plans will not be required to be in compliance with the provision.
The health care reform law provides that the rules that until now have barred discrimination in favor of the highly compensated by self-insured plans also apply to nongrandfathered, insured group health plans effective for plan years beginning on or after September 23, 2010.
For more information on the nondiscrimination provisions, read Healthcare Reform Update: Health Reform Bars Discrimination in Favor of the Highly Compensated.
IRS Notice 2011-1 announces that compliance with nondiscrimination provisions should not be required until guidance is issued that specifies in what respects insured plans are subject to the same statutory provisions that apply to self-insured plans, and in what respects the two types of plans are subject to different application of those statutory provisions.
In addition, any sanctions for failure to comply do not apply until after the required guidance has been issued.
In addition, to give insured group health plan sponsors adequate time to implement any changes required as a result of the regulations or other guidance, the Departments anticipate that the guidance will not apply until plan years beginning a specified period after issuance.
The notice will be included in Internal Revenue Bulletin 2011-2, dated Jan. 10, 2011.