Shared Responsibility for Employers: Safe Harbor Methods (IRS Notice 2012-58 Summary)

Posted September 6, 2012 Company News

IRS Notice 2012-58, released on August 31, 2012, describes the safe harbor methods that employers can use to determine which employees should be treated as full-time employees for purposes of the shared responsibility provisions of health reform.

The administrative guidance in this notice also identifies that employers will not be subject to an assessable payment for an employee if the coverage offered to that employee was affordable based on the employee’s W-2 wages. This affordability safe harbor enables an employer to compare the single-only employee premium contribution to each employee’s W-2 wages as opposed to household income as initially communicated in the legislation. Under the safe harbor, coverage offered by an employer-sponsored plan is considered “affordable” to a particular employee if the employer’s required contribution towards single-only coverage does not exceed 9.5 percent of the employee’s W-2 wages.


To download the IRS Notice 2012- 58, please click here.


Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.

Additionally, the messages and content within the Pittsburgh Health Care Reform group do not reflect the advisory services of Henderson Brothers, Inc.


Contributing EXPERT: Shari Herrle


To download the PDF version of this EXPERT UPDATE, please click on the link below: