Department of Treasury, Internal Revenue Service: Accessibility of Employer Coverage for Family Members of Employees



October 27, 2022

The Honorable Ron Wyden
The Honorable Mike Crapo
Ranking Member
Finance Committee
United States Senate

The Honorable Richard Neal
The Honorable Kevin Brady
Republican Leader
Ways and Means Committee
House of Representatives

Matter: Department of Treasury, Internal Revenue Service: Accessibility of Employer Coverage for Family Members of Employees

Pursuant to Section 801(a)(2)(A) of Title 5 of the United States Code, here is our report on a major rule promulgated by the Department of the Treasury, Internal Revenue Service (IRS) titled “Affordability of employer coverage for family members of employees” (RIN: 1545-BQ16). We received the rule on October 11, 2022. It was published in the Federal Register as final settlement on October 13, 2022. 87 Fed. Reg. 61979. The effective date is December 12, 2022.

According to the IRS, this final rule provides guidance on the affordability of employer-sponsored minimum essential coverage (employer coverage) for family members of employees. The IRS said the rule amends the regulations in Section 36B of the Internal Revenue Code (26 USC § 36B) regarding eligibility for the premium tax credit to provide that the affordability of coverage for coverage for an employee’s family members is based on the employee’s share of the cost of covering the employee and their family members, not the cost of covering the employee only. The IRS also said the rule adds a minimum value rule for family members of employees based on benefits provided to family members.

Attached is our assessment of the IRS’ compliance with the procedural steps required by Title 5 Section 801(a)(1)(B)(i) through (iv) with respect to the rule. If you have any questions about this report or would like to contact GAO officials responsible for valuation work relating to the subject matter of the rule, please contact Shari Brewster, Assistant General Counsel, at (202) 512-6398.

Shirley A.Jones
Associate Legal Director


cc: Oluwafunmilayo A. Taylor
Chief, Publications and Regulations Service, Legal Processing Division
Treasury Department


(RIN: 1545-BQ16)

(i) Cost-benefit analysis

The Treasury Department, Internal Revenue Service (IRS) conducted an economic analysis of this final rule. According to the IRS, the benefits of the rule include making health insurance coverage more affordable for currently uninsured people as well as providing currently insured people with an additional health insurance option that could provide coverage to lower cost or with more comprehensive benefits. Regarding the costs of the rule, the IRS advised that the addition of the new Premium Tax Credit (PTC) eligibility option increases the cost for the IRS to assess PTC claims. . According to the IRS, the agency’s PTC infrastructure will require ad hoc changes to certain processes, forms, and instructions to be implemented in time for the 2023 tax year, and the IRS expects the cost of these modifications is negligible. Additionally, the IRS said it expects the rule’s total administrative costs for Medicare and Medicaid Service Centers, state and federal exchanges, state Medicaid agencies and direct enrollment partners to improve. would be modest. The IRS also noted that with respect to transfer payments, the rule may increase the amount of CIP paid by the government and reduce employer contributions as well as possibly increase the amount of tax revenue from taxes on the income and social charges.

(ii) Agency Actions Regarding the Regulatory Flexibility Act (RFA), 5 USC §§ 603–605, 607, and 609

The IRS has certified that this final rule will not have a significant economic impact on a significant number of small entities within the meaning of the law.

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Warrants Reform Act of 1995, 2 USC §§ 1532-1535

The IRS has determined that this final rule will have no effect on state, local, or tribal governments, as a whole, or the private sector, of $100 million (updated annually for inflation ) or more.

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 and following.

On April 7, 2022, the IRS released a proposed rule. 87 Fed. Reg. 20354. The IRS received 3,888 comments on the proposed rule and responded to the comments in this final rule.

Red Tape Reduction Act (PRA), 44 USC §§ 3501–3520

The IRS has determined that this final rule contains no information collection requirements under the law.

Legal authorization of the rule

The IRS has promulgated this final rule pursuant to section 7805 of title 26 of the United States Code.

Executive Order No. 12866 (Planning and Regulatory Review)

The IRS has determined that this final rule is subject to review under the order.

Executive Order No. 13132 (Federalism)

The IRS has determined that this final rule has no federalism implications and does not impose substantial direct compliance costs on state and local governments or prejudge state law within the meaning of the IRS. ‘arrangement.


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