The IRS has informally stated that it is intending to make some significant changes to the Determination Letter program, and is even considering eliminating the program for individually designed retirement plans (other than perhaps initial and final determination letters). The agency apparently is looking to streamline its operations and focus its resources on other areas.
Internal Revenue Service
What Does PPACA Stand For? Punitive Penalties Are Clearly Authorized
By Paul M. Hamburger on
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…
District Court Upholds Validity of IRS Rule Authorizing Premium Tax Credits to Individuals Who Enroll in Health-Care Coverage through Federally-Facilitated Exchanges
By Todd Mobley on
A district court in the District of Columbia recently held that the Internal Revenue Service’s (“IRS”) rule authorizing premium tax credits to individuals who enroll in health-care coverage through federal exchanges was unambiguously consistent with the “text, structure, and purpose” of the Affordable Care Act (“ACA”). Halbig v. Sebelius, No. 13-cv-0623, 2014 U.S. Dist. LEXIS 4853 (D.D.C. Jan. 15, 2014).
The Exchanges, Premium Tax Credits, and Challenged IRS Rule
To facilitate the purchase of “minimum essential” health-insurance coverage (which the ACA requires that most Americans either obtain or pay a tax penalty for failing to do so (the “Individual Mandate”)), the ACA provides for the establishment of American Health Benefit Exchanges (“Exchanges”). As explained by the U.S. Department of Health and Human Services (“HHS”), the Exchanges act as “a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage . . . .” Currently, sixteen states and the District of Columbia have elected to establish Exchanges (“State-run Exchanges”). Because the remaining thirty-four states have currently declined to do so, HHS has (pursuant to its authority under the ACA) stepped-in and created Exchanges on their behalf (“Federally-facilitated Exchanges”).