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IRS Amends Pay Or Play Rule For Multiemployer Plans

04/08/13

  10:18:00 am, by MedBen5   , 223 words,  
Categories: News, Health Plan Management

IRS Amends Pay Or Play Rule For Multiemployer Plans

The Internal Revenue Service recently clarified a transition rule pertaining to the “pay or play” mandate of the Affordable Care Act. According to Robert Projansky of Proskauer’s ERISA Practice Center Blog, an employer required by a collective bargaining agreement to contribute to a multiemployer plan for some or all of its employees is treated as having offered coverage to employees for whom it contributes as long as the plan offers to individuals who satisfy the eligibility provisions coverage that:

  • is affordable;
  • provides minimum value; and,
  • offers dependent (i.e., children up to age 26) coverage, subject to the transition rule for dependent coverage.

“This relief is notable in part because it applies to all employees for whom the employer is required by the collective bargaining agreement to make contributions, not just those who end up being offered the coverage.” Projansky writes. “In addition, an employer can utilize this relief even if the multiemployer plan’s eligibility provisions result in coverage not being offered within three months after employment begins.

Projansky also noted that multiemployer plans must still comply with the 90-day waiting period limitations.

As written, the amendment for the transition rule applies only for 2014. You can read the revised language in the Federal Register.

MedBen clients with questions regarding the clarification may contact Vice President of Complance Caroline Fraker at cfraker@medben.com

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