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IRS Addresses ACA Rules for Employer-Provided Health Care Coverage

On December 16, 2015, the Internal Revenue Service (IRS) issued Notice 2015-87 to address how certain provisions under the Affordable Care Act (ACA) apply to employer-provided health care coverage. The notice covers the ACA's market reforms as well as the employer shared responsibility rules and related reporting requirements.

Key provisions of the notice include:

  1. Confirmation of adjusted employer shared responsibility penalty amounts. For 2015, the adjusted penalty amounts are $2,080 and $3,120. For 2016, the adjusted penalty amounts are $2,160 and $3,240. The IRS anticipates that adjustments for future years will be posted on the IRS.gov website.

  2. Application of the adjusted affordability percentage to the affordability safe harbors under the employer shared responsibility rules. The adjusted amounts are 9.56 percent for 2015 and 9.66 percent for 2016.

  3. Clarification on how the employee contribution for coverage is calculated. The IRS has provided information on how the cost is affected by HRA and flex contributions, opt-out payments and Service Contract Act/Davis-Bacon Act fringe benefits.




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