Whether an employer makes the requisite offer of group health plan coverage is critical to the application of the Affordable Care Act’s employer shared responsibility rules as reflected in final implementing regulations issued earlier this year (and see here for a useful IRS summary of those rules). The rules are codified in a newly added provision of the Internal Revenue Code, i.e., Code § 4980H. Generally, Code § 4980H imposes penalties or “assessable payments” where “at least one full-time employee” qualifies for subsidized coverage from a public exchange, and either:

There is no shortage of commentary on the particulars of the Code § 4980H assessable payments. Surprisingly little attention has been paid however—either by the regulators or the commentators—to what, exactly, it means to make an offer of coverage. In at least one instance, the Treasury Department and IRS let us know what an offer of coverage is not, when they clarified that an employer cannot foreclose the possibility of all penalties by providing coverage to all its full-time employees at no cost. (Their views are set out in the preamble to a May 3, 2013 proposed regulation dealing with minimum value.)

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