September 11, 2012
For additional information:
Jason Hammersla
202-422-4652 (cell)

Council testifies on IRS implementation of PPACA

Employers view implementation challenges as 'very substantial' while generally commending IRS for efforts to date

WASHINGTON, DC — "The Patient Protection and Affordable Care Act (PPACA) is a large and complex statute, involving many new responsibilities for employers and other stakeholders. Given that reality, the U.S. Treasury Department and Internal Revenue Service (IRS) have, overall, done a commendable job helping employers and others understand and comply with the law's requirements," Seth Perretta, a partner at the firm of Crowell & Moring, told a U.S. House of Representatives Ways and Means Oversight Subcommittee panel today.

Testifying on behalf of the American Benefits Council, for whom he is outside health tax counsel, Perretta noted that while the American Benefits Council, and the employer community as a whole, has not always agreed with the interpretations Treasury and IRS have made regarding certain provisions of the law, the regulators have generally sought to give employers flexibility in implementing it . "The agencies have been very accessible during the regulatory process — not only welcoming input, but also actively seeking our views on how to make the law administrable," Perretta said.

Perretta described a number of examples in which the agencies have addressed challenges faced by employer plan sponsors, such as:

  • New Form W-2 reporting requirements for employer-sponsored group health coverage: After receiving feedback from the Council and the employer community generally, the IRS provided employers with additional time to better understand how the new rule works and to update their administrative systems and practices to facilitate eventual compliance with the rule.

  • PPACA's "pay-or-play" provision: The IRS has generally been responsive in providing employers with helpful guidance and possible safe harbors regarding the determination of who is a "full-time employee" as well as whether coverage is "affordable."

  • Fees for the Patient-Centered Outcomes Research Institute (PCORI) Trust Fund: The IRS took the correct step when it began the implementation process for the PCORI Fee by requesting comments on how the fees should be calculated and paid, including possible rules and safe harbors, followed by proposed regulations giving employers flexibility to continue providing coverage without fear of incurring additional liability.

Perretta also raised a number of important and highly anticipated decisions yet to be made by Treasury and IRS, in areas such as reporting and disclosure obligations, determining the minimum value of coverage and treatment of wellness programs. "In these and other regulatory projects yet to be developed, we urge the IRS to be receptive to input from employers in the same fashion that it has sought and received suggestions since enactment of the PPACA," Perretta said.

Perretta's testimony is available on the Council's website at:

For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director, communications, at 202-289-6700.

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.