Employers may not face penalties for refusing to offer affordable coverage to employee dependents, and they may not even have to extend coverage to dependents, depending on regulations unveiled this month by the Internal Revenue Service, according to a Business Insurance report.
Under the healthcare reform law, employers would be assessed an annual $3,000 per employee penalty starting in 2014 if they do not provide affordable healthcare coverage. The penalty would apply when an employee's health insurance premium contribution is more than 9.5 percent of household income. The IRS unveiled a safe harbor provision this month for public comment that limits this affordability test to employee and self-only coverage, not dependent coverage.
Group healthcare plans would qualify for the safe harbor, protecting them from the affordability penalty, as long as employees can choose premiums that do not exceed 9.5 percent of their wages for self-only coverage in the least costly plan available.
Experts say the IRS deliberately excluded dependent coverage from the affordability test because the affordability requirement only applies to employees. Some experts say that employers may only be required to offer coverage to full-time employees, but the law is not clear on that point and would require clarification.
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Under the healthcare reform law, employers would be assessed an annual $3,000 per employee penalty starting in 2014 if they do not provide affordable healthcare coverage. The penalty would apply when an employee's health insurance premium contribution is more than 9.5 percent of household income. The IRS unveiled a safe harbor provision this month for public comment that limits this affordability test to employee and self-only coverage, not dependent coverage.
Group healthcare plans would qualify for the safe harbor, protecting them from the affordability penalty, as long as employees can choose premiums that do not exceed 9.5 percent of their wages for self-only coverage in the least costly plan available.
Experts say the IRS deliberately excluded dependent coverage from the affordability test because the affordability requirement only applies to employees. Some experts say that employers may only be required to offer coverage to full-time employees, but the law is not clear on that point and would require clarification.
Related Articles on Coding, Billing and Collections:
Surgery Center Coding Guidance: Vertebroplasty
Michigan Imposes 1% Tax on Healthcare Claims
OIG: Ambulatory Surgery Centers, HOPDs Frequently Report Wrong Place-of-Service Codes