On April 26, 2012, the Internal Revenue Service (IRS) issued three notices requesting comments relating to forthcoming regulations implementing PPACA's employer mandate, individual mandate and individual tax credit provisions. Comments on the issues described in the notices are due on or before June 11, 2012.

Notice 2012-31: Determining "Minimum Value" for Individual Tax Credits and Employer Penalties

A premium tax credit, set forth in section 36(B) of the Internal Revenue Code (Code) will be available beginning in 2014 for certain individuals who purchase coverage through an "Affordable Insurance Exchange" (Exchange). An individual is ineligible if he or she is eligible for other "minimum essential coverage," including coverage under an employer-sponsored plan that is "affordable" and "provides minimum value." IRS Notice 2012-31 focuses on determining "minimum value." Under section 36(B)(c)(2)(C)(ii) of the Code, a plan fails to provide minimum value if "the plan's share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs."

The notice seeks comments on potential approaches to determine whether an employer-sponsored plan provides minimum value. Methods discussed include a calculator where an employer-sponsored plan inputs benefits, coverage and cost-sharing information; safe harbors in the forms of checklists; or, for plans with nonstandard features, the ability to obtain certification by an actuary that the plan provides minimum value.

The definition of "minimum value" is of particular importance to employers. A penalty under section 4980H may be imposed on applicable employers if any full-time employees receive a premium tax credit.

Notice 2012-32: Establishing Reporting Burdens for "Minimum Essential Coverage"

In Notice 2012-32, the IRS requests comments relating to "minimum essential coverage" reporting requirements. Pursuant to section 6055 of the Code, every health insurance issuer, sponsor of a self-insured health plan, or any other entity providing "minimum essential coverage" must file annual returns with the IRS, reporting "information for each individual for whom minimum essential coverage is provided." The entity filing the information return must furnish a written statement to each individual listed on the return as well. The notice anticipates that for insured group health plans, the health insurance issuer will be responsible for the reporting.

Comments sought address a variety of issues, including how to determine when an individual's coverage begins and ends, how to minimize reporting duplication and whether any special rules should apply for voluntary employee's beneficiary associations. The reporting requirement will apply to coverage provided on or after January 1, 2014.

Notice 2012-33: Applicable Large Employer Reporting Requirements

Notice 2012-33 requests comments on issues arising under section 6056, a reporting requirement directed at "applicable large employers." These employers are defined in section 4098H(c)(2) as those who employed an average of at least 50 full-time employees during the preceding calendar year. Section 6056 requires employers to report specified information, including the terms and conditions of the healthcare coverage provided to the employer's full-time employees for the year and specific identifying information for each full-time employee covered under the employer-sponsored plan. Each full-time employee listed in the return must be furnished a written statement regarding the information relating to their coverage that was reported on the return. The reporting requirement will be effective for years beginning after December 31, 2013.

The IRS is particularly interested in comments relating to how to reduce duplication between the section 6056 reporting requirement, section 6055 "minimum essential benefit" requirement and the Form W-2 reporting requirements set forth in section 6051.