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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.






Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104







January 30, 2014


 State and Federal Law Alert




IRS Modifies "Unaffordability" Provisions of the Individual Shared Responsibility Rules




The IRS has issued proposed regulations clarifying certain provisions of the individual shared responsibility provisions of the Patient Protection and Affordable Care Act ("PPACA"). Under these provisions, all individuals must either be insured by "minimum essential coverage" or pay a penalty on their federal tax returns. Under an unaffordability exception, individuals who cannot afford coverage because their required contribution towards minimum essential coverage exceeds 8% of their annual household income are not subject to the penalty. (See the Alert of 2/14/13 for further details.)




For purposes of the unaffordability rule, when determining if the cost of coverage exceeds 8%, amounts made available under an HRA would reduce the employee's required contribution if they may be used for employee contribution payments. Amounts that can only be used to reimburse cost sharing (such as deductibles or co-pays) are not taken into account when determining unaffordability because they do not affect the employee's cost of acquiring minimum essential coverage.


Cafeteria Plans


Under the proposal, if an employee elects to make pre-tax, salary reduction contributions, these amounts are treated as employee contributions for purposes of determining unaffordability, even though they are considered to be employer contributions for income tax calculation purposes.


The IRS is asking for comments on how to treat employer credits to a cafeteria plan when they cannot be converted into cash or taxable benefits.


Wellness Programs


Group health plans are permitted to provide incentives, such as a reduction in required employee contributions for the successful completion of a wellness program. For purposes of the unaffordability rule, when calculating required employee contributions, it is to be assumed that all employees satisfy a wellness program's tobacco cessation program and receive the program's incentive reward. Accordingly, if the tobacco cessation program provides a contribution discount for non-tobacco users, the contribution discount is included in the unaffordability analysis regardless of whether the employee completes the program.


Incentives for all other types of wellness programs are not included in the unaffordability analysis, regardless of whether the employee successfully completes the program or receives a contribution discount.




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Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.