Health Care

Health-law provision delayed

Health insurance broker Gary Hardman calls it a Christmas present for some of his firm's clients.

Last week, the Internal Revenue Service announced that it would suspend the implementation of a rule regarding insured group health plans whose benefit plans favor one group of employees over others.

The nondiscrimination rule, tied to the federal Affordable Care Act passed earlier this year, applied to companies whose plans weren't grandfathered by the act and that offered fully insured health plans in which a group of employees classified by the act as "highly compensated individuals" have different eligibility requirements or benefits from other groups of employees covered under the same plan.

Once implemented, violation of the nondiscrimination rule would mean stiff monetary penalties — an excise tax equal to $100 a day for each employee not classified as a "highly compensated individual."

The rule was set to take effect Jan. 1. But the IRS said the rules won't take effect until it issues further clarification on the subject of nondiscrimination.

"This is a big change for fully insured plans," said Hardman, president of Hardman Benefit Plans.

Security 1st Title is one of Hardman's clients that is affected.

"It just means we won't have to go through all the hassle of the testing now," said Jennifer Weast, executive vice president and co-owner. "It wouldn't have been a problem because we don't discriminate."

But the nondiscrimination testing process by the IRS would have been "just another thing that would have taken us away from what we do" as a company, Weast added.

The dilemma of the testing process does not go completely away with the IRS announcement, a competing broker said.

"I do think this delay does have the potential to be positive," said Karen Vines, director of business development and client services at IMA of Kansas. "Depending on what the final outcome is, it still could be problematic."