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Non-Discrimination Rule Update under PPACA

Healthcare ReformUnder PPACA (The Patient Protection and Affordable Care Act, commonly called the Affordable Care Act or Obamacare) non-grandfathered group health plans were advised not to discriminate in favor of “highly compensated individuals.”

PPACA defines “highly compensated individuals” as a group that includes the five highest-paid officers, but also shareholders who own more than 10 percent of the company’s stock and the highest-paid 25 percent of the employees.   The IRS has delayed enforcement of the non-discrimination rules.

This week, Robert Pear, a reporter for the New York Times asked the IRS what happened to the PPACA’s nondiscrimination provisions.  The IRS advised that they will “wait at least until 2015 to enforce the nondiscrimination rules, at the earliest, because defining terms such as “highly compensated employee” and “discrimination” has been difficult.”

We expect the IRS to require fully insured group health plans to comply with the same rules as self-insured plans.  Attached is a copy of the current non-discrimination rules for self-insured plans that you can use as a guide.  We will advise you as we hear more on this.

To view and/or download the document, click here.

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