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IRS Issues Guidance on Health Care Reform Act's "Play-or-Pay" Penalty

January 22, 2013


To many employers, the most notorious aspect of the Affordable Care Act ("ACA") is the employer shared responsibility penalty tax provision (also known as "play-or-pay").  This component of the ACA requires an employer having 50 or more full-time equivalent employees to either:

  • Offer its full-time employees health care coverage that is both affordable and provides minimum value; or
  • Face the prospect of paying a substantial penalty for failing to do so.
On January 2, 2013, the IRS issued detailed guidance in the form of proposed regulations. A newsletter discussing nuances and implications the new play-or-pay regulations is available to download.