IRS Provides More Guidance on “Affordability” and “Minimum Value” Under The ACA

IRS has finalized certain rules and regulations to assist sponsors of employer-provided health coverage (and the carriers of same) in determining whether such coverage meets the requirements of the Affordable Care Act (ACA) for purposes of the “play-or-pay” rules.

Most of the finalized regulations reinforce the proposed regulations from before, but there are few highlights and adjustments, such as:

• Incentives provided under wellness programs that reduce either cost-sharing or premiums will not be taken into account for purposes of determining affordability or minimum value unless the incentives are provided as part of a program to prevent or reduce tobacco use.
• HRA contributions earmarked for cost-sharing purposes will be taken into account for determining the minimum value of a plan.
• Employers’ contributions under a cafeteria plan for health coverage may generally be taken into account for purposes of determining affordability.