by James A. Woehlke, Esq., CPA
General Counsel / COO, MBL Benefits Consulting Corp.


On October 12, the IRS called for public comment on enhancing the current regulations on nondiscrimination in self-insured group health plans to cover the new requirements passed in the Affordable Care Act. After reviewing the maze of statutes that together impose the nondiscrimination requirement on nongrandfathered, fully-insured plans, the Notice summarizes the consequences when a plan fails the nondiscrimination rules as follows:

If a self-insured plan fails to comply with [the nondiscrimination rules], highly compensated individuals lose a tax benefit; if an insured group health plan fails to comply with [the nondiscrimination rules], the plan is subject to a civil action to compel it to provide nondiscriminatory benefits and the plan or plan sponsor is subject to an excise tax or civil money penalty of $100 per day per individual discriminated against.

Public comments are due November 4, 2010.

If you have questions about the impact of the nondiscrimination rules on your group plans, please contact your MBL Benefits consultant or the author at jwoehlke@mblbc.com.

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Additional resources available at

IRS Notice 2010-63: http://www.irs.gov/irb/2010-41_IRB/ar07.html

Rev. 10/28/2010.

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