Proposed regs. issued on large employer health coverage shared-responsibility provisions.

• Author: Nevius, Alistair M.

The IRS has issued proposed regulations providing guidance on the large employer "shared responsibility" provisions in Sec. 4980H (REG-138006-12). Taxpayers can rely on the proposed regulations until the IRS issues final regulations or other applicable guidance. The IRS also posted FAQs on its website, explaining how the shared-responsibility provisions work and who is subject to them.

The 144-page proposed regulations follow up on four notices the IRS issued in 2011 and 2012, which outlined possible approaches and asked for public comments (Notices 2011-36, 2011-73, 2012-17, and 2012-58). The proposed regulations generally incorporate the provisions of Notice 2012-58, as well as many of the provisions of Notices 2011-36, 2011-73, and 2012-17, with some changes in response to comments received.

Under Sec. 4980H, an applicable large employer is subject to a penalty if its employer-sponsored health coverage does not provide "minimum essential coverage" or is not affordable relative to the employee's household income and at least one full-time employee has been certified as having enrolled in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee. An employer is an "applicable large employer" for a calendar year if, during the preceding calendar yea; it employed on average at least 50 full-time employees. An employee is a full-time employee for any month if he or she was employed, on average, at least 30 hours per week.

The proposed regulations contain various definitions (Prop. Rep...