What Does PPACA Stand For? Punitive Penalties Are Clearly Authorized

A recently posted IRS Q&A raises the specter of serious penalties for non-compliance with the Affordable Care Act. The context of the question relates to the consequences to employers that do not establish a health insurance plan for their own employees, but instead reimburse them for premiums they pay for other health insurance. The IRS relied on its earlier guidance, Notice 2013-54 (See our prior blog entry), and pointed out that these premium reimbursement arrangements (known as "employer payment plans") raise significant compliance issues under the ACA.

The IRS indicated that after-tax reimbursement arrangements, whereby an employer pays taxable money to employees that they can use for health coverage or any other purpose, are not a problem. However, tax-free reimbursement arrangements could be a problem for the IRS. As if to emphasize the seriousness of this issue, the IRS warned that any arrangement that does not comply with its rules (which are only