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IRS Provides Expatriate Plan Guidance | Ohio Employee Benefits

By Danielle Capilla, Chief Compliance Officer at United Benefit Advisors

The IRS released a notice providing further guidance on expatriate health coverage. The guidance generally provided for:
  • Temporary relief allowing taxpayers to apply the requirements of the Expatriate Health Coverage Clarification Act (EHCCA) using a reasonable and good faith interpretation of the EHCCA while issuers, employers, and Expatriate health careplan sponsors modify their current arrangements to comply with the EHCCA.
  • Clarification that the EHCCA exemption from Affordable Care Act (ACA) provisions does not apply to requirements of sections 6055 and 6056 (play or pay reporting). However, statements to individuals reporting an offer of minimum essential coverage may be furnished electronically (unless the recipient refuses consent).
  • PCORI fee calculations may exclude lives covered under a specified health insurance policy that is issued or renewed on or after July 1, 2015, or under an applicable self-insured health plan for plan years starting on or after July 1, 2015, if the facts and circumstances demonstrate that the policy or plan
    1. was designed and issued specifically to cover primarily employees (a)   who are working and residing outside the United States, or (b)   who are not citizens or residents of the United States but who are assigned to work in the United States for a specific and temporary purpose or who work in the United States for no more than six months of the policy year or plan year; or
    2. was designed to cover individuals who are members of a group of similarly situated individuals for purposes of § 3(d)(3)(C) of the EHCCA under the explained special rule for groups of similarly situated individuals.
The IRS will consider an individual to be a member of a group of similarly situated individuals if
  • the group of individuals satisfies the standards under §§ 3(d)(3)(C)(i) and (ii) of the EHCCA;
  • in the case of a group organized to travel outside the United States, each member of the group is expected to travel or reside outside the United States for at least six months of the policy year (or, in the case of a policy year that is less than 12 months, for at least half of the policy year), and in the case of a group organized to travel within the United States, each member of the group is expected to travel or reside in the United States for not more than 12 months; and
  • the group of individuals meets the test for having associational ties under § 2791(d)(3)(B) through (F) of the PHS Act (42 U.S.C. 300gg-91(d)(3)(B) through (F)).
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