Recent Developments In Employee Benefits And Executive Compensation - July 2011 (No. 3)

IRS Publishes Potential Approaches to Shared Responsibility and Other Health Care Reform Requirements

The IRS recently issued IRS Notice 2011-36 ("Notice"), which includes potential regulatory approaches to the shared responsibility and other requirements set forth in the Patient Protection and Affordable Care Act ("PPACA" or "Health Care Reform").

Effective January 1, 2014, Health Care Reform's shared responsibility provisions (also known as the "pay or play rules") impose a monthly penalty on any "applicable large employer" who has one or more "full-time employees" who enroll in a health plan through a state health care exchange and receives a premium tax credit or cost-sharing reduction. These provisions apply to employers with 50 or more "full-time employees." The potential employer penalty directly correlates to an employer's number of full-time employees for a calendar month. Generally, an employee is a "full-time employee" if he or she works at least 30