IRS Asks for Health Non-Discrimination Rule Input

Notice 2010-63 explains that the Treasury Department and the Internal Revenue Service (IRS) are considering issuing the guidance about the extension of nondiscrimination rules to insured group health plans and want to know from commenters what sort of guidance would be most helpful.

The extension of the nondiscrimination regulations is effective for plan years beginning on or after Thursday, September 23, 2010. Insured plans that are grandfathered are not required to comply with the new nondiscrimination provisions prohibiting bias in favor of highly compensated individuals.  

The new regulation provides that an insured group health plan failing to comply with the nondiscrimination requirements is subject to taxes, remedies, and penalties. Under the tax code, generally an excise tax of $100 per day applies per individual discriminated against for each day the plan does not comply with the requirement. Under the Employee Retirement Income Security Act (ERISA), there is also the possibility of a civil action to prohibit noncompliance, and federal law also provides the potential for civil money penalties of $100 per day per individual discriminated against for each day the plan does not comply with the requirement.

Comments must be submitted by November 4:

• by e-mail to Notice.Comments@irscounsel.treas.gov. Include “Notice 2010-63” in the subject line.
• by regular mail to CC:PA:LPD:PR (Notice 2010-63), Room 5205, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
• by hand or courier delivery Monday through Friday between 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (Notice 2010-63), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington DC 20224.

The IRS request for information is at http://www.irs.gov/pub/irs-drop/n-10-63.pdf