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SPBA Alert

IRS announced (Notice 2014-56) the PCORI adjusted applicable dollar amounts.  For policy years and plan years ending on or after October 1, 2014 and before October 1, 2015, the adjusted applicable dollar amount is $2.08.

For policy and plan years ending on or after October 1, 2015, and before October 1, 2019 the adjusted applicable dollar amount will be published in future guidance.

Cafeteria Plan Election Changes and Marketplace Coverage

IRS Notice 2014-55 expands the permitted election changes under a cafeteria plan for participants who may wish to revoke an election in order to purchase a plan through the health insurance marketplace (Marketplace).

1.  If an employee’s hours of service are reduced so that the employee is expected to average less than 30 hours of service per week, the Notice allows employees to prospectively revoke coverage, even if the reduction in hours does not render the employee ineligible for the group health plan.

2.  The notice permits an employee to revoke the cafeteria plan election to pay the coverage pre-tax when an employee seeks to buy coverage in the Marketplace.   Many SPBA members gave us feedback on this issue, which SPBA President Anne shared with IRS.  We are pleased that IRS was responsive to our concerns.

IRS Notice 2014-55 is effective on September 18, 2014.

Proposed Approach to Look-Back Measurement Method

IRS Notice 2014-49 sets forth a proposed approach to the application of the look-back measurement method, which may be used to determine if an employee is a full-time employee for purposes of §4980H of the Internal Revenue Code, in situations in which the measurement period applicable to an employee changes.

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