On October 11, 2022, the US Department of Treasury (Treasury) and the Internal Revenue Service (IRS) issued final regulations to modify how affordability under the Affordable Care Act (ACA) is determined for an offer of coverage to a family member by an employer-sponsored group health plan, effective for the tax year beginning after December 31, 2022. By changing the affordability analysis to look at the total cost to cover family members—rather than the cost to only the employee—the new rule expands eligibility to receive premium tax credits (PTCs) in the ACA marketplace to an employee’s spouse and dependents.
The IRS recently issued new mortality tables for 2018, which will likely increase pension funding liabilities for many plan sponsors. Plan sponsors should consider options to delay the use of the new mortality tables for funding purposes, while large plan sponsors should consider the option to utilize plan-specific mortality tables instead.
On Thursday, May 4, 2017, the US House of Representatives passed the American Health Care Act by the slimmest of margins with no Democrats voting in favor of the bill. Amendments to the original bill attracted more support from both moderate and conservative Republicans by the introduction of two amendments: one that gives more leeway to the states to request waivers from the more onerous provisions of the ACA that cannot be changed through the budget reconciliation process, and a second one that adds $8 billion of funding to the bill to help improve the “high-risk pools” that could be set up by states to provide coverage to individuals with pre-existing conditions who cannot find affordable insurance in the open market.
IRS Regulations Provide That Certain Employees of Partnerships Now Have Self-Employment Status for Employee Benefit and Tax Purposes
The IRS and US Department of Treasury have issued final and temporary regulations which address benefit and self-employment tax issues regarding partners in a partnership which is the sole owner of a second, wholly owned legal entity. The regulations are intended to clarify that where the partners are separately working for the second legal entity, such individuals may not be treated as employees, and must be treated as self-employed individuals for both self-employment and employee benefit plan purposes. As a result, the partners may not be provided the tax benefits provided employees with respect to benefit plans such as cafeteria plans, parking and transit benefits, health benefits and health insurance.