The Department of Treasury and the Internal Revenue Service (IRS) recently issued three notices related to the health care law that address minimum value and information reporting on health insurance coverage. In addition, the Departments of Health and Human Services, Labor and the Treasury issued a separate bulletin regarding verification of access to employer-sponsored coverage.

Minimum Value

Under the Patient Protection and Affordable Care Act (PPACA), employers are required to provide coverage to their full-time employees that is both “affordable” and meets “minimum value,” or face penalties for full-time employees that qualify for tax credits through health insurance exchanges. Under the IRS code, a plan will not be considered to have met the minimum value requirement if “the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs.”

IRS Notice 2012-31 provides information and requests public comment on an approach to determine whether an eligible employer-sponsored health plan provides minimum value. Starting in 2014, whether such a plan provides minimum value will be relevant to eligibility for the premium tax credit and application of the employer shared responsibility payment.

In comments submitted in October 2011, ABC as part of the coalition Employers for Flexibility in Health Care (EFHC), offered suggestions on a workable definition of minimum value. EFHC advocated for a minimum value definition that recognizes the need for flexible benefits design and cost-sharing structures and cannot be based on an overall dollar value of a plan and must recognize the great diversity among employer plans. Employer plan costs can vary widely and a minimum value calculation must allow for standardization that takes into account all factors and is administratively simple.

Comments may be submitted in writing by June 11. Instructions to submit comments are available in the notice.

Information Reporting on Health Insurance Coverage

Notices 2012-32 and 2012-33 ask for comments to help develop guidance on annual information reporting related to health insurance coverage. Notice 2012-32 invites comments concerning the reporting requirements for health insurance issuers, certain employers that sponsor self-insured plans, government agencies and certain other parties that provide minimum essential coverage to an individual. Notice 2012-33 invites comments on reporting for applicable large employers.

Comments may be submitted in writing by June 11. Instructions to submit comments are available in the notice.

Verification of Access to Employer-Sponsored Coverage

Under this bulletin, the Departments of Health and Human Services, Labor and the Treasury are requesting comments from the public on a proposed interim strategy and potential regulatory approach to verify an applicant’s access to qualifying coverage in an employer-sponsored plan under PPACA. The bulletin also is requesting comments on the development of a long-term verification strategy.

Part I of this bulletin provides background information and an overview of the relevant legal provisions as well as a discussion of stakeholder considerations, Part II outlines a proposed interim strategy for verification related to coverage during the 2014 and 2015 plan years, and Part III describes considerations and requests comment on long-term strategies for verification related to coverage during plan year 2016 and beyond.

Comments may be sent to, EmployerCoverageBulletin@cms.hhs.gov.

In its October 2011 comments, EFHC pointed out that failure to develop a workable reporting and verification system will increase the administrative burden and costs for employer-sponsored plans without creating any benefit for employees or the quality of their health care.