Department of Labor (DOL) has issued certain rules regarding “affordability”. Wednesday this week the Internal Revenue Service (IRS) issued their own rules on the same subject. Both are at odds with each other. So who are we going to believe?
DOL definition of affordable mandates the cost must be 9.5% or less of the employee’s gross income (Safe Harbor).
The IRS now says, in a memorandum issued Wednesday, that a plan is affordable only if the cost is 8% or less of a household’s adjusted gross income.
Is this a case of one hand not knowing what the other hand is doing?
Editor’s Note: This is great! Pick and choose your decision based on the “source” you like the best. Very old strategy employed before with dealing with the Texas Department of Insurance – keep calling the department and talk to as many as you can until you get the answer you are looking for and then say “Would you please put that in writing and send me an email confirming our conversation!”
