Application of Nondiscrimination Requirements Delayed

Federal reform law established a requirement that fully insured group plans may not discriminate in favor of highly compensated individuals. In December, the IRS published notice 2011-1 (PDF), thereby delaying the application of the nondiscrimination requirements for fully-insured group health plans until regulations can be issued. Accordingly, a sponsor of a fully-insured plan will not be subject to the applicable excise tax penalty for plan years before the IRS issues the regulations.