On Monday, March 18, SHRM submitted comments to the Internal Revenue Service (IRS) on their proposed rule on “shared responsibility” for employers regarding health care coverage.
The health care reform law requires large employers to offer health care to employees. The proposed IRS rule defines “large employer” and details how the number of full-time employees should be calculated for purposes of the coverage requirements. The definitions are particularly important to HR as employers can be penalized for failing to offer coverage, if the offered coverage does not meet minimum standards, or if the coverage is deemed “not affordable” resulting in an employee qualifying for subsidized coverage through a health care exchange.
SHRM’s comments focus principally on maintaining and, in some cases, expanding the proposed rule’s safe harbors and flexible options for transitioning to the Patient Protection and Affordable Care Act (PPACA). Specifically, SHRM strongly supports the various safe harbors contained in the proposed rule because of the additional flexibility they afford employers as they seek to comply with the PPACA.
SHRM also makes several specific suggestions on the following:
- Flexibility for new employers who need time to establish employee benefit programs;
- Who should be excluded from the rule’s definition of employees such as those covered under health plans of another family member, through student health plans or through another employer; and
- Clarification and giving additional time for employers to appeal when the employer believes an employee erroneously obtained coverage through an exchange.
Finally, SHRM encouraged the IRS to adopt a flexible implementation and enforcement approach to allow employers to address the challenges of maintaining their employer-sponsored health coverage while complying with the law.