AICPA Writes IRS about Proposed Rules on Employer Shared Responsibility for Health Insurance

March 27, 2013

The American Institute of CPAs sent comments to the Internal Revenue Service (IRS) on March 14 about proposed regulations providing guidance on employer shared responsibility for health insurance coverage under the Patient Protection and Affordable Care Act.

The AICPA commended the IRS for developing proposed regulations that are “comprehensive and remove much of the uncertainty around the implementation of the statutory provisions of section 4980H” and for “developing various rules to ease an employer’s administrative burden, such as providing safe harbors to determine whether an employee’s premiums for coverage are affordable.”

The AICPA made key recommendations:

  • Concerning the definition of the term “dependent,” which it said should be extended to treat a child as a dependent for the entire month in which the child turns 21.

  • Regarding the determination of “applicable large employer status,” including the seasonal worker exception as well as the calculation of number of full-time employees.
  • Relating to the determination of “full-time employees,” including the non-hourly employee calculation using a days worked equivalency and also the look-back measurement method and when there are new variable hour and new seasonal employees.
  • Regarding the imposition of assessable payments under sections 4980H(a) and 4980H(b), as well as safe harbors, and the allocated reduction of 30 full-time employees.