Internal Revenue Bulletin 2015-52 (PDF rendition): IRS Notices

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# INTERNAL REVENUE BULLETIN

IRS

## HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

## INCOME TAX

### Rev. Rul. 2015-23, page 866.

Interest rates: underpayment and overpayments. The rates for
interest determined under section 6621 of the code for the
calendar quarter beginning January 1, 2016, will be 3 percent
for overpayments (2 percent in the case of a corporation), 3
percent for the underpayments, and 5 percent for large cor-
poration underpayments. The rate of interest paid on the por-
tion of a corporation overpayment exceeding $10,000 will be
0.5 percent.

## EMPLOYEE PLANS

### Notice 2015-84, page 880.

The Notice provides a list of changes in plan qualification
requirements to be used by plan sponsors submitting determi-
nation letter applications for plans during the period beginning
February 1, 2016 and ending January 31, 2017.

### Notice 2015-85, page 884.

This notice sets forth updates on the corporate bond monthly
yield curve, the corresponding spot segment rates for Decem-
ber 2015 used under § 417(e)(3)(D), the 24-month average
segment rates applicable for December 2015, and the 30-year
Treasury rates. These rates reflect the application of
§ 430(h)(2)(C)(iv), which was added by the Moving Ahead for
Progress in the 21st Century Act, Public Law 112-141 (MAP-
21) and amended by section 2003 of the Highway and Trans-
portation Funding Act of 2014 (HATFA).

Bulletin No. 2015-52
December 28, 2015

### Notice 2015-86, page 887.

This notice provides guidance on the application of the decision
in Obergefell v. Hodges, 576 U.S. __ , 135 S.Ct. 2584 (2015),
to retirement plans qualified under section 401(a) of the Inter-
nal Revenue Code (Code) and to health and welfare plans,
including cafeteria plans under section 125 of the Code.

### Notice 2015-87, page 889.

This notice provides further guidance on the application of
various provisions of the Affordable Care Act (ACA) to
employer-provided health coverage. The notice addresses,
among other topics: (1) application of ACA market reform
provisions to health reimbursement arrangements and certain
other forms of employer-provided health coverage; (2) impact
of HRA contributions, employer flex contributions, opt-out pay-
ments, and fringe benefit payments under certain federal stat-
utes on determination of the employee's required contribution
for purposes of §§ 36B and 5000A, and for any related
consequences under § 4980H; (3) clarification of how
§§ 4980H, 6055 and 6056 apply to government entities and
to certain forms of government-provided health coverage; and
(4) application of the COBRA continuation coverage rules to
unused amounts in a health flexible spending arrangement
(health FSA) carried over and available in later years.

## EXEMPT ORGANIZATIONS

### Announcement 2015-36, page 904.

Serves notice to potential donors of a stipulated decision by
the United States Tax Court in declaratory judgment proceed-
ings under Section 7428.

(Continued on the next page)

## EXCISE TAX

### Notice 2015-87, page 889.

## The IRS Mission

Provide America's taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.

## Introduction

The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of inter-
nal practices and procedures that affect the rights and duties
of taxpayers are published.

Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identify-
ing details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.

Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

### Part I .- 1986 Code.

This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.

### Part II .- Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legisla-
tion and Related Committee Reports.

Part III .- Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury's Office of the Assistant Sec-
retary (Enforcement).

### Part IV .- Items of General Interest.

This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

## Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

### Section 6621 .- Determination of Rate of Interest

26 CFR 301.6621-1: Interest rate.

### Rev. Rul. 2015-23

Section 6621 of the Internal Revenue
Code establishes the interest rates on over-
payments and underpayments of tax. Under
section 6621(a)(1), the overpayment rate is
the sum of the federal short-term rate plus 3
percentage points (2 percentage points in the
case of a corporation), except the rate for the
portion of a corporate overpayment of tax
exceeding $10,000 for a taxable period is
the sum of the federal short-term rate plus
0.5 of a percentage point. Under section
6621(a)(2), the underpayment rate is the
sum of the federal short-term rate plus 3
percentage points.

Section 6621(c) provides that for pur-
poses of interest payable under section
6601 on any large corporate underpayment,
the underpayment rate under section
6621(a)(2) is determined by substituting “5
percentage points" for "3 percentage points."

See section 6621(c) and section
301.6621-3 of the Regulations on Proce-
dure and Administration for the definition
of a large corporate underpayment and for
the rules for determining the applicable
date. Section 6621(c) and section
301.6621-3 are generally effective for pe-
riods after December 31, 1990.

Section 6621(b)(1) provides that the
Secretary will determine the federal short-
term rate for the first month in each calendar

quarter. Section 6621(b)(2)(A) provides that
the federal short-term rate determined under
section 6621(b)(1) for any month applies
during the first calendar quarter beginning
after that month. Section 6621(b)(2)(B) pro-
vides that in determining the addition to tax
under section 6654 for failure to pay esti-
mated tax for any taxable year, the federal
short-term rate that applies during the third
month following the taxable year also ap-
plies during the first 15 days of the 4th
month following the taxable year. Section
6621(b)(3) provides that the federal short-
term rate for any month is the federal short-
term rate determined during that month by
the Secretary in accordance with section
1274(d), rounded to the nearest full percent
(or, if a multiple of 1/2 of 1 percent, the rate
is increased to the next highest full percent).

Notice 88-59, 1988-1 C.B. 546, an-
nounced that in determining the quarterly
interest rates to be used for overpayments
and underpayments of tax under section
6621, the Internal Revenue Service will
use the federal short-term rate based on
daily compounding because that rate is
most consistent with section 6621 which,
pursuant to section 6622, is subject to
daily compounding.

The federal short-term rate determined
in accordance with section 1274(d) during
October 2015 is the rate published in Rev-
enue Ruling 2015-22, 2015-44 IRB 610
to take effect beginning November 1,
2015. The federal short-term rate, rounded
to the nearest full percent, based on daily
compounding determined during the month
of October 2015 is 0 percent. Accordingly,
an overpayment rate of 3 percent (2 percent

in the case of a corporation) and an under-
payment rate of 3 percent are established for
the calendar quarter beginning January 1,
2016. The overpayment rate for the portion
of a corporate overpayment exceeding
$10,000 for the calendar quarter beginning
January 1, 2016 is 0.5 percent. The under-
payment rate for large corporate underpay-
ments for the calendar quarter beginning
January 1, 2016, is 5 percent. These rates
apply to amounts bearing interest during
that calendar quarter.

The 3 percent rate also applies to esti-
mated tax underpayments for the first cal-
endar quarter in 2016.

Interest factors for daily compound in-
terest for annual rates of 0.5 percent are
published in Appendix A of this Revenue
Ruling. Interest factors for daily com-
pound interest for annual rates of 2 per-
cent, 3 percent and 5 percent are published
in Tables 57, 59, and 63 of Rev. Proc.
95-17, 1995-1 C.B. 611, 613, and 617.

Annual interest rates to be compounded
daily pursuant to section 6622 that apply for
prior periods are set forth in the tables ac-
companying this revenue ruling.

## DRAFTING INFORMATION

The principal author of this revenue
ruling is Deborah Colbert-James of the
Office of Associate Chief Counsel (Proce-
dure & Administration). For further infor-
mation regarding this revenue ruling, con-
tact Ms. Colbert-James at (202) 317-3400
(not a toll-free call).

### APPENDIX A

365 Day Year

Days

0.5% Compound Rate 184 Days Factor Days Factor Days Factor

0.000013699

0.000863380

125

0.001713784

0.000027397

0.000877091

126

0.001727506

0.000041096

0.000890801

127

0.001741228

0.000054796

0.000904512

128

0.001754951

0.000068495

0.000918223

129

0.001768673

0.000082195

0.000931934

130

0.001782396

365 Day Year

0.5% Compound Rate 184 Days

0.000095894

0.000945646

131

0.001796119

0.000109594

0.000959357

132

0.001809843

0.000123294

0.000973069

133

0.001823566

0.000136995

0.000986781

134

0.001837290

0.000150695

0.001000493

135

0.001851013

0.000164396

0.001014206

136

0.001864737

0.000178097

0.001027918

137

0.001878462

0.000191798

0.001041631

138

0.001892186

0.000205499

0.001055344

139

0.001905910

0.000219201

0.001069057

140

0.001919635

0.000232902

0.001082770

141

0.001933360

0.000246604

0.001096484

142

0.001947085

0.000260306

0.001110197

143

0.001960811

0.000274008

0.001123911

144

0.001974536

0.000287711

0.001137625

145

0.001988262

0.000301413

0.001151339

146

0.002001988

0.000315116

0.001165054

147

0.002015714

0.000328819

0.001178768

148

0.002029440

0.000342522

0.001192483

149

0.002043166

0.000356225

0.001206198

150

0.002056893

0.000369929

0.001219913

151

0.002070620

0.000383633

0.001233629

152

0.002084347

0.000397336

0.001247344

153

0.002098074

0.000411041

0.001261060

154

0.002111801

0.000424745

0.001274776

155

0.002125529

0.000438449

0.001288492

156

0.002139257

0.000452154

0.001302208

157

0.002152985

0.000465859

0.001315925

158

0.002166713

0.000479564

0.001329641

159

0.002180441

0.000493269

0.001343358

160

0.002194169

0.000506974

0.001357075

161

0.002207898

0.000520680

100

0.001370792

162

0.002221627

0.000534386

101

0.001384510

163

0.002235356

0.000548092

102

0.001398227

164

0.002249085

0.000561798

103

0.001411945

165

0.002262815

0.000575504

104

0.001425663

166

0.002276544

0.000589211

105

0.001439381

167

0.002290274

0.000602917

106

0.001453100

168

0.002304004

0.000616624

107

0.001466818

169

0.002317734

0.000630331

108

0.001480537

170

0.002331465

0.000644039

109

0.001494256

171

0.002345195

0.000657746

110

0.001507975

172

0.002358926

0.000671454

111

0.001521694

173

0.002372657

0.000685161

112

0.001535414

174

0.002386388

0.000698869

113

0.001549133

175

0.002400120

0.000712578

114

0.001562853

176

0.002413851

365 Day Year

0.5% Compound Rate 184 Days

0.000726286

115

0.001576573

177

0.002427583

0.000739995

116

0.001590293

178

0.002441315

0.000753703

117

0.001604014

179

0.002455047

0.000767412

118

0.001617734

180

0.002468779

0.000781121

119

0.001631455

181

0.002482511

0.000794831

120

0.001645176

182

0.002496244

0.000808540

121

0.001658897

183

0.002509977

0.000822250

122

0.001672619

184

0.002523710

0.000835960

123

0.001686340

0.000849670

124

0.001700062

366 Day Year 0.5% Compound Rate 184 Days Days Factor Days Factor Days Factor

0.000013661

0.000861020

125

0.001709097

0.000027323

0.000874693

126

0.001722782

0.000040984

0.000888366

127

0.001736467

0.000054646

0.000902040

128

0.001750152

0.000068308

0.000915713

129

0.001763837

0.000081970

0.000929387

130

0.001777522

0.000095632

0.000943061

131

0.001791208

0.000109295

0.000956735

132

0.001804893

0.000122958

0.000970409

133

0.001818579

0.000136620

0.000984084

134

0.001832265

0.000150283

0.000997758

135

0.001845951

0.000163947

0.001011433

136

0.001859638

0.000177610

0.001025108

137

0.001873324

0.000191274

0.001038783

138

0.001887011

0.000204938

0.001052459

139

0.001900698

0.000218602

0.001066134

140

0.001914385

0.000232266

0.001079810

141

0.001928073

0.000245930

0.001093486

142

0.001941760

0.000259595

0.001107162

143

0.001955448

0.000273260

0.001120839

144

0.001969136

0.000286924

0.001134515

145

0.001982824

0.000300590

0.001148192

146

0.001996512

0.000314255

0.001161869

147

0.002010201

0.000327920

0.001175546

148

0.002023889

0.000341586

0.001189223

149

0.002037578

0.000355252

0.001202900

150

0.002051267

0.000368918

0.001216578

151

0.002064957

0.000382584

0.001230256

152

0.002078646

0.000396251

0.001243934

153

0.002092336

0.000409917

0.001257612

154

0.002106025

0.000423584

0.001271291

155

0.002119715

TABLE OF INTEREST RATES PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986 OVERPAYMENTS AND UNDERPAYMENTS

366 Day Year

0.5% Compound Rate 184 Days

0.000437251

0.001284969

156

0.002133405

0.000450918

0.001298648

157

0.002147096

0.000464586

0.001312327

158

0.002160786

0.000478253

0.001326006

159

0.002174477

0.000491921

0.001339685

160

0.002188168

0.000505589

0.001353365

161

0.002201859

0.000519257

100

0.001367044

162

0.002215550

0.000532925

101

0.001380724

163

0.002229242

0.000546594

102

0.001394404

164

0.002242933

0.000560262

103

0.001408085

165

0.002256625

0.000573931

104

0.001421765

166

0.002270317

0.000587600

105

0.001435446

167

0.002284010

0.000601269

106

0.001449127

168

0.002297702

0.000614939

107

0.001462808

169

0.002311395

0.000628608

108

0.001476489

170

0.002325087

0.000642278

109

0.001490170

171

0.002338780

0.000655948

110

0.001503852

172

0.002352473

0.000669618

111

0.001517533

173

0.002366167

0.000683289

112

0.001531215

174

0.002379860

0.000696959

113

0.001544897

175

0.002393554

0.000710630

114

0.001558580

176

0.002407248

0.000724301

115

0.001572262

177

0.002420942

0.000737972

116

0.001585945

178

0.002434636

0.000751643

117

0.001599628

179

0.002448331

0.000765315

118

0.001613311

180

0.002462025

0.000778986

119

0.001626994

181

0.002475720

0.000792658

120

0.001640678

182

0.002489415

0.000806330

121

0.001654361

183

0.002503110

0.000820003

122

0.001668045

184

0.002516806

0.000833675

123

0.001681729

0.000847348

124

0.001695413

PERIOD

RATE

In 1995-1 C.B. DAILY RATE TABLE

Before Jul. 1, 1975

Table 2, pg. 557

Jul. 1, 1975-Jan. 31, 1976

Table 4, pg. 559

Feb. 1, 1976-Jan. 31, 1978

Table 3, pg. 558

Feb. 1, 1978-Jan. 31, 1980

Table 2, pg. 557

Feb. 1, 1980-Jan. 31, 1982

12%

Table 5, pg. 560

Feb. 1, 1982-Dec. 31, 1982

20%

Table 6, pg. 560

Jan. 1, 1983-Jun. 30, 1983

16%

Table 37, pg. 591

TABLE OF INTEREST RATES PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986 OVERPAYMENTS AND UNDERPAYMENTS

Jul. 1, 1983-Dec. 31, 1983

11%

Table 27, pg. 581

Jan. 1, 1984-Jun. 30, 1984

11%

Table 75, pg. 629

Jul. 1, 1984-Dec. 31, 1984

11%

Table 75, pg. 629

Jan. 1, 1985-Jun. 30, 1985

13%

Table 31, pg. 585

Jul. 1, 1985-Dec. 31, 1985

11%

Table 27, pg. 581

Jan. 1, 1986-Jun. 30, 1986

10%

Table 25, pg. 579

Jul. 1, 1986-Dec. 31, 1986

Table 23, pg. 577

TABLE OF INTEREST RATES FROM JAN. 1, 1987 - DEC. 31, 1998 OVERPAYMENTS UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

RATE

1995-1 C.B. TABLE

Jan. 1, 1987-Mar. 31, 1987

575

577

Apr. 1, 1987-Jun. 30, 1987

575

577

Jul. 1, 1987-Sep. 30, 1987

575

577

Oct. 1, 1987-Dec. 31, 1987

577

10%

579

Jan. 1, 1988-Mar. 31, 1988

10%

627

11%

629

Apr. 1, 1988-Jun. 30, 1988

625

10%

627

Jul. 1, 1988-Sep. 30, 1988

625

10%

627

Oct. 1, 1988-Dec. 31, 1988

10%

627

11%

629

Jan. 1, 1989-Mar. 31, 1989

10%

579

11%

581

Apr. 1, 1989-Jun. 30, 1989

11%

581

12%

583

Jul. 1, 1989-Sep. 30, 1989

11%

581

12%

583

Oct. 1, 1989-Dec. 31, 1989

10%

579

11%

581

Jan. 1, 1990-Mar. 31, 1990

10%

579

11%

581

Apr. 1, 1990-Jun. 30, 1990

10%

579

11%

581

Jul. 1, 1990-Sep. 30, 1990

10%

579

11%

581

Oct. 1, 1990-Dec. 31, 1990

10%

579

11%

581

Jan. 1, 1991-Mar. 31, 1991

10%

579

11%

581

Apr. 1, 1991-Jun. 30, 1991

577

10%

579

Jul. 1, 1991-Sep. 30, 1991

577

10%

579

Oct. 1, 1991-Dec. 31, 1991

577

10%

579

Jan. 1, 1992-Mar. 31, 1992

623

625

Apr. 1, 1992-Jun. 30, 1992

621

623

Jul. 1, 1992-Sep. 30, 1992

621

623

Oct. 1, 1992-Dec. 31, 1992

619

621

Jan. 1, 1993-Mar. 31, 1993

571

573

Apr. 1, 1993-Jun. 30, 1993

571

573

Jul. 1, 1993-Sep. 30, 1993

571

573

Oct. 1, 1993-Dec. 31, 1993

571

573

Jan. 1, 1994-Mar. 31, 1994

571

573

Apr. 1, 1994-Jun. 30, 1994

571

573

TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS

TABLE OF INTEREST RATES FROM JAN. 1, 1987 - DEC. 31, 1998 OVERPAYMENTS UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

RATE

1995-1 C.B. TABLE

Jul. 1, 1994-Sep. 30, 1994

573

575

Oct. 1, 1994-Dec. 31, 1994

575

577

Jan. 1, 1995-Mar. 31, 1995

575

577

Apr. 1, 1995-Jun. 30, 1995

577

10%

579

Jul. 1, 1995-Sep. 30, 1995

575

577

Oct. 1, 1995-Dec. 31, 1995

575

577

Jan. 1, 1996-Mar. 31, 1996

623

625

Apr. 1, 1996-Jun. 30, 1996

621

623

Jul. 1, 1996-Sep. 30, 1996

623

625

Oct. 1, 1996-Dec. 31, 1996

623

625

Jan. 1, 1997-Mar. 31, 1997

575

577

Apr. 1, 1997-Jun. 30, 1997

575

577

Jul. 1, 1997-Sep. 30, 1997

575

577

Oct. 1, 1997-Dec. 31, 1997

575

577

Jan. 1, 1998-Mar. 31, 1998

575

577

Apr. 1, 1998-Jun. 30, 1998

573

575

Jul. 1, 1998-Sep. 30, 1998

573

575

Oct. 1, 1998-Dec. 31, 1998

573

575

RATE

1995-1 C.B. TABLE

PAGE

Jan. 1, 1999-Mar. 31, 1999

573

Apr. 1, 1999-Jun. 30, 1999

575

Jul. 1, 1999-Sep. 30, 1999

575

Oct. 1, 1999-Dec. 31, 1999

575

Jan. 1, 2000-Mar. 31, 2000

623

Apr. 1, 2000-Jun. 30, 2000

625

Jul. 1, 2000-Sep. 30, 2000

625

Oct. 1, 2000-Dec. 31, 2000

625

Jan. 1, 2001-Mar. 31, 2001

577

Apr. 1, 2001-Jun. 30, 2001

575

Jul. 1, 2001-Sep. 30, 2001

573

Oct. 1, 2001-Dec. 31, 2001

573

Jan. 1, 2002-Mar. 31, 2002

571

Apr. 1, 2002-Jun. 30, 2002

571

Jul. 1, 2002-Sep. 30, 2002

571

Oct. 1, 2002-Dec. 31, 2002

571

Jan. 1, 2003-Mar. 31, 2003

569

# TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

PAGE

Apr. 1, 2003-Jun. 30, 2003

569

Jul. 1, 2003-Sep. 30, 2003

569

Oct. 1, 2003-Dec. 31, 2003

567

Jan. 1, 2004-Mar. 31, 2004

615

Apr. 1, 2004-Jun. 30, 2004

617

Jul. 1, 2004-Sep. 30, 2004

615

Oct. 1, 2004-Dec. 31, 2004

617

Jan. 1, 2005-Mar. 31, 2005

569

Apr. 1, 2005-Jun. 30, 2005

571

Jul. 1, 2005-Sep. 30, 2005

571

Oct. 1, 2005-Dec. 31, 2005

573

Jan. 1, 2006-Mar. 31, 2006

573

Apr. 1, 2006-Jun. 30, 2006

573

Jul. 1, 2006-Sep. 30, 2006

575

Oct. 1, 2006-Dec. 31, 2006

575

Jan. 1, 2007-Mar. 31, 2007

575

Apr. 1, 2007-Jun. 30, 2007

575

Jul. 1, 2007-Sep. 30, 2007

575

Oct. 1, 2007-Dec. 31, 2007

575

Jan. 1, 2008-Mar. 31, 2008

621

Apr. 1, 2008-Jun. 30, 2008

619

Jul. 1, 2008-Sep. 30, 2008

617

Oct. 1, 2008-Dec. 31, 2008

619

Jan. 1, 2009-Mar. 31, 2009

569

Apr. 1, 2009-Jun. 30, 2009

567

Jul. 1, 2009-Sep. 30, 2009

567

Oct. 1, 2009-Dec. 31, 2009

567

Jan. 1, 2010-Mar. 31, 2010

567

Apr. 1, 2010-Jun. 30, 2010

567

Jul. 1, 2010-Sep. 30, 2010

567

Oct. 1, 2010-Dec. 31, 2010

567

Jan. 1, 2011-Mar. 31, 2011

565

Apr. 1, 2011-Jun. 30, 2011

567

Jul. 1, 2011-Sep. 30, 2011

567

Oct. 1, 2011-Dec. 31, 2011

565

Jan. 1, 2012-Mar. 31, 2012

613

Apr. 1, 2012-Jun. 30, 2012

613

Jul. 1, 2012-Sep. 30, 2012

613

Oct. 1, 2012-Dec. 31, 2012

613

Jan. 1, 2013-Mar. 31, 2013

565

Apr. 1, 2013-Jun. 30, 2013

565

Jul. 1, 2013-Sep. 30, 2013

565

# TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

PAGE

Oct. 1, 2013-Dec. 31, 2013

565

Jan. 1, 2014-Mar. 31, 2014

565

Apr. 1, 2014-Jun. 30, 2014

565

Jul. 1, 2014-Sep. 30, 2014

565

Oct. 1, 2014-Dec. 31, 2014

565

Jan. 1, 2015-Mar. 31, 2015

565

Apr. 1, 2015-Jun. 30, 2015

565

Jul. 1, 2015-Sep. 30, 2015

565

Oct. 1, 2015-Dec. 31, 2015

565

Jan. 1, 2016-Mar. 31, 2016

613

TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

OVERPAYMENTS

UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

RATE

1995-1 C.B. TABLE

Jan. 1, 1999-Mar. 31, 1999

571

573

Apr. 1, 1999-Jun. 30, 1999

573

575

Jul. 1, 1999-Sep. 30, 1999

573

575

Oct. 1, 1999-Dec. 31, 1999

573

575

Jan. 1, 2000-Mar. 31, 2000

621

623

Apr. 1, 2000-Jun. 30, 2000

623

625

Jul. 1, 2000-Sep. 30, 2000

623

625

Oct. 1, 2000-Dec. 31, 2000

623

625

Jan. 1, 2001-Mar. 31, 2001

575

577

Apr. 1, 2001-Jun. 30, 2001

573

575

Jul. 1, 2001-Sep. 30, 2001

571

573

Oct. 1, 2001-Dec. 31, 2001

571

573

Jan. 1, 2002-Mar. 31, 2002

569

571

Apr. 1, 2002-Jun. 30, 2002

569

571

Jul. 1, 2002-Sep. 30, 2002

569

571

Oct. 1, 2002-Dec. 31, 2002

569

571

Jan. 1, 2003-Mar. 31, 2003

567

569

Apr. 1, 2003-Jun. 30, 2003

567

569

Jul. 1, 2003-Sep. 30, 2003

567

569

Oct. 1, 2003-Dec. 31, 2003

565

567

Jan. 1, 2004-Mar. 31, 2004

613

615

Apr. 1, 2004-Jun. 30, 2004

615

617

Jul. 1, 2004-Sep. 30, 2004

613

615

Oct. 1, 2004-Dec. 31, 2004

615

617

## TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

OVERPAYMENTS

UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

RATE

1995-1 C.B. TABLE

Jan. 1, 2005-Mar. 31, 2005

567

569

Apr. 1, 2005-Jun. 30, 2005

569

571

Jul. 1, 2005-Sep. 30, 2005

569

571

Oct. 1, 2005-Dec. 31, 2005

571

573

Jan. 1, 2006-Mar. 31, 2006

571

573

Apr. 1, 2006-Jun. 30, 2006

571

573

Jul. 1, 2006-Sep. 30, 2006

573

575

Oct. 1, 2006-Dec. 31, 2006

573

575

Jan. 1, 2007-Mar. 31, 2007

573

575

Apr. 1, 2007-Jun. 30, 2007

573

575

Jul. 1, 2007-Sep. 30, 2007

573

575

Oct. 1, 2007-Dec. 31, 2007

573

575

Jan. 1, 2008-Mar. 31, 2008

619

621

Apr. 1, 2008-Jun. 30, 2008

617

619

Jul. 1, 2008-Sep. 30, 2008

615

617

Oct. 1, 2008-Dec. 31, 2008

617

619

Jan. 1, 2009-Mar. 31, 2009

567

569

Apr. 1, 2009-Jun. 30, 2009

565

567

Jul. 1, 2009-Sep. 30, 2009

565

567

Oct. 1, 2009-Dec. 31, 2009

565

567

Jan. 1, 2010-Mar. 31, 2010

565

567

Apr. 1, 2010-Jun. 30, 2010

565

567

Jul. 1, 2010-Sep. 30, 2010

565

567

Oct. 1, 2010-Dec. 31, 2010

565

567

Jan. 1, 2011-Mar. 31, 2011

563

565

Apr. 1, 2011-Jun. 30, 2011

565

567

Jul. 1, 2011-Sep. 30, 2011

565

567

Oct. 1, 2011-Dec. 31, 2011

563

565

Jan. 1, 2012-Mar. 31, 2012

611

613

Apr. 1, 2012-Jun. 30, 2012

611

613

Jul. 1, 2012-Sep. 30, 2012

611

613

Oct. 1, 2012-Dec. 31, 2012

611

613

Jan. 1, 2013-Mar. 31, 2013

563

565

Apr. 1, 2013-Jun. 30, 2013

563

565

Jul. 1, 2013-Sep. 30, 2013

563

565

Oct. 1, 2013-Dec. 31, 2013

563

565

Jan. 1, 2014-Mar. 31, 2014

563

565

Apr. 1, 2014-Jun. 30, 2014

563

565

Jul. 1, 2014-Sep. 30, 2014

563

565

Oct. 1, 2014-Dec. 31, 2014

563

565

Jan. 1, 2015-Mar. 31, 2015

563

565

TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

OVERPAYMENTS

UNDERPAYMENTS

RATE

1995-1 C.B. TABLE

RATE

1995-1 C.B. TABLE

Apr. 1, 2015-Jun. 30, 2015

563

565

Jul. 1, 2015-Sep. 30, 2015

563

565

Oct. 1, 2015-Dec. 31, 2015

563

565

Jan. 1, 2016-Mar. 31, 2016

611

613

TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT

RATE

1995-1 C.B. TABLE

Jan. 1, 1991-Mar. 31, 1991

13%

585

Apr. 1, 1991-Jun. 30, 1991

12%

583

Jul. 1, 1991-Sep. 30, 1991

12%

583

Oct. 1, 1991-Dec. 31, 1991

12%

583

Jan. 1, 1992-Mar. 31, 1992

11%

629

Apr. 1, 1992-Jun. 30, 1992

10%

627

Jul. 1, 1992-Sep. 30, 1992

10%

627

Oct. 1, 1992-Dec. 31, 1992

625

Jan. 1, 1993-Mar. 31, 1993

577

Apr. 1, 1993-Jun. 30, 1993

577

Jul. 1, 1993-Sep. 30, 1993

577

Oct. 1, 1993-Dec. 31, 1993

577

Jan. 1, 1994-Mar. 31, 1994

577

Apr. 1, 1994-Jun. 30, 1994

577

Jul. 1, 1994-Sep. 30, 1994

10%

579

Oct. 1, 1994-Dec. 31, 1994

11%

581

Jan. 1, 1995-Mar. 31, 1995

11%

581

Apr. 1, 1995-Jun. 30, 1995

12%

583

Jul. 1, 1995-Sep. 30, 1995

11%

581

Oct. 1, 1995-Dec. 31, 1995

11%

581

Jan. 1, 1996-Mar. 31, 1996

11%

629

Apr. 1, 1996-Jun. 30, 1996

10%

627

Jul. 1, 1996-Sep. 30, 1996

11%

629

Oct. 1, 1996-Dec. 31, 1996

11%

629

Jan. 1, 1997-Mar. 31, 1997

11%

581

Apr. 1, 1997-Jun. 30, 1997

11%

581

Jul. 1, 1997-Sep. 30, 1997

11%

581

Oct. 1, 1997-Dec. 31, 1997

11%

581

Jan. 1, 1998-Mar. 31, 1998

11%

581

Apr. 1, 1998-Jun. 30, 1998

10%

579

Jul. 1, 1998-Sep. 30, 1998

10%

579

# TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT

RATE

1995-1 C.B. TABLE

Oct. 1, 1998-Dec. 31, 1998

10%

579

Jan. 1, 1999-Mar. 31, 1999

577

Apr. 1, 1999-Jun. 30, 1999

10%

579

Jul. 1, 1999-Sep. 30, 1999

10%

579

Oct. 1, 1999-Dec. 31, 1999

10%

579

Jan. 1, 2000-Mar. 31, 2000

10%

627

Apr. 1, 2000-Jun. 30, 2000

11%

629

Jul. 1, 2000-Sep. 30, 2000

11%

629

Oct. 1, 2000-Dec. 31, 2000

11%

629

Jan. 1, 2001-Mar. 31, 2001

11%

581

Apr. 1, 2001-Jun. 30, 2001

10%

579

Jul. 1, 2001-Sep. 30, 2001

577

Oct. 1, 2001-Dec. 31, 2001

577

Jan. 1, 2002-Mar. 31, 2002

575

Apr. 1, 2002-Jun. 30, 2002

575

Jul. 1, 2002-Sep. 30, 2002

575

Oct. 1, 2002-Dec. 31, 2002

575

Jan. 1, 2003-Mar. 31, 2003

573

Apr. 1, 2003-Jun. 30, 2003

573

Jul. 1, 2003-Sep. 30, 2003

573

Oct. 1, 2003-Dec. 31, 2003

571

Jan. 1, 2004-Mar. 31, 2004

619

Apr. 1, 2004-Jun. 30, 2004

621

Jul. 1, 2004-Sep. 30, 2004

619

Oct. 1, 2004-Dec. 31, 2004

621

Jan. 1, 2005-Mar. 31, 2005

573

Apr. 1, 2005-Jun. 30, 2005

575

Jul. 1, 2005-Sep. 30, 2005

575

Oct. 1, 2005-Dec. 31, 2005

577

Jan. 1, 2006-Mar. 31, 2006

577

Apr. 1, 2006-Jun. 30, 2006

577

Jul. 1, 2006-Sep. 30, 2006

10%

579

Oct. 1, 2006-Dec. 31, 2006

10%

579

Jan. 1, 2007-Mar. 31, 2007

10%

579

Apr. 1, 2007-Jun. 30, 2007

10%

579

Jul. 1, 2007-Sep. 30, 2007

10%

579

Oct. 1, 2007-Dec. 31, 2007

10%

579

Jan. 1, 2008-Mar. 31, 2008

625

Apr. 1, 2008-Jun. 30, 2008

623

Jul. 1, 2008-Sep. 30, 2008

621

Oct. 1, 2008-Dec. 31, 2008

623

Jan. 1, 2009-Mar. 31, 2009

573

Apr. 1, 2009-Jun. 30, 2009

571

Jul. 1, 2009-Sep. 30, 2009

571

# TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT

RATE

1995-1 C.B. TABLE

Oct. 1, 2009-Dec. 31, 2009

571

Jan. 1, 2010-Mar. 31, 2010

571

Apr. 1, 2010-Jun. 30, 2010

571

Jul. 1, 2010-Sep. 30, 2010

571

Oct. 1, 2010-Dec. 31, 2010

571

Jan. 1, 2011-Mar. 31, 2011

569

Apr. 1, 2011-Jun. 30, 2011

571

Jul. 1, 2011-Sep. 30, 2011

571

Oct. 1, 2011-Dec. 31, 2011

569

Jan. 1, 2012-Mar. 31, 2012

617

Apr. 1, 2012-Jun. 30, 2012

617

Jul. 1, 2012-Sep. 30, 2012

617

Oct. 1, 2012-Dec. 31, 2012

617

Jan. 1, 2013-Mar. 31, 2013

569

Apr. 1, 2013-Jun. 30, 2013

569

Jul. 1, 2013-Sep. 30, 2013

569

Oct. 1, 2013-Dec. 31, 2013

569

Jan. 1, 2014-Mar. 31, 2014

569

Apr. 1, 2014-Jun. 30, 2014

569

Jul. 1, 2014-Sep. 30, 2014

569

Oct. 1, 2014-Dec. 31, 2014

569

Jan. 1, 2015-Mar. 31, 2015

569

Apr. 1, 2015-Jun. 30, 2015

569

Jul. 1, 2015-Sep. 30, 2015

569

Oct. 1, 2015-Dec. 31, 2015

569

Jan. 1, 2016-Mar. 31, 2016

617

TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT

RATE

1995-1 C.B. TABLE

Jan. 1, 1995-Mar. 31, 1995

6.5%

572

Apr. 1, 1995-Jun. 30, 1995

7.5%

574

Jul. 1, 1995-Sep. 30, 1995

6.5%

572

Oct. 1, 1995-Dec. 31, 1995

6.5%

572

Jan. 1, 1996-Mar. 31, 1996

6.5%

620

Apr. 1, 1996-Jun. 30, 1996

5.5%

618

Jul. 1, 1996-Sep. 30, 1996

6.5%

620

Oct. 1, 1996-Dec. 31, 1996

6.5%

620

Jan. 1, 1997-Mar. 31, 1997

6.5%

572

Apr. 1, 1997-Jun. 30, 1997

6.5%

572

Jul. 1, 1997-Sep. 30, 1997

6.5%

572

## TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT

RATE

1995-1 C.B. TABLE

Oct. 1, 1997-Dec. 31, 1997

6.5%

572

Jan. 1, 1998-Mar. 31, 1998

6.5%

572

Apr. 1, 1998-Jun. 30, 1998

5.5%

570

Jul. 1. 1998-Sep. 30, 1998

5.5%

570

Oct. 1, 1998-Dec. 31, 1998

5.5%

570

Jan. 1, 1999-Mar. 31, 1999

4.5%

568

Apr. 1, 1999-Jun. 30, 1999

5.5%

570

Jul. 1, 1999-Sep. 30, 1999

5.5%

570

Oct. 1, 1999-Dec. 31, 1999

5.5%

570

Jan. 1, 2000-Mar. 31, 2000

5.5%

618

Apr. 1, 2000-Jun. 30, 2000

6.5%

620

Jul. 1, 2000-Sep. 30, 2000

6.5%

620

Oct. 1, 2000-Dec. 31, 2000

6.5%

620

Jan. 1, 2001-Mar. 31, 2001

6.5%

572

Apr. 1, 2001-Jun. 30, 2001

5.5%

570

Jul. 1, 2001-Sep. 30, 2001

4.5%

568

Oct. 1, 2001-Dec. 31, 2001

4.5%

568

Jan. 1, 2002-Mar. 31, 2002

3.5%

566

Apr. 1, 2002-Jun. 30, 2002

3.5%

566

Jul. 1, 2002-Sep. 30, 2002

3.5%

566

Oct. 1, 2002-Dec. 31, 2002

3.5%

566

Jan. 1, 2003-Mar. 31, 2003

2.5%

564

Apr. 1, 2003-Jun. 30, 2003

2.5%

564

Jul. 1, 2003-Sep. 30, 2003

2.5%

564

Oct. 1, 2003-Dec. 31, 2003

1.5%

562

Jan. 1, 2004-Mar. 31, 2004

1.5%

610

Apr. 1, 2004-Jun. 30, 2004

2.5%

612

Jul. 1, 2004-Sep. 30, 2004

1.5%

610

Oct. 1, 2004-Dec. 31, 2004

2.5%

612

Jan. 1, 2005-Mar. 31, 2005

2.5%

564

Apr. 1, 2005-Jun. 30, 2005

3.5%

566

Jul. 1, 2005-Sep. 30, 2005

3.5%

566

Oct. 1, 2005-Dec. 31, 2005

4.5%

568

Jan. 1, 2006-Mar. 31, 2006

4.5%

568

Apr. 1, 2006-Jun. 30, 2006

4.5%

568

Jul. 1, 2006-Sep. 30, 2006

5.5%

570

Oct. 1, 2006-Dec. 31, 2006

5.5%

570

Jan. 1, 2007-Mar. 31, 2007

5.5%

570

Apr. 1, 2007-Jun. 30, 2007

5.5%

570

Jul. 1, 2007-Sep. 30, 2007

5.5%

570

Oct. 1, 2007-Dec. 31, 2007

5.5%

570

Jan. 1, 2008-Mar. 31, 2008

4.5%

616

Apr. 1, 2008-Jun. 30, 2008

3.5%

614

## TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT

1995-1 C.B.

RATE

TABLE

Jul. 1, 2008-Sep. 30, 2008

2.5%

612

Oct. 1, 2008-Dec. 31, 2008

3.5%

614

Jan. 1, 2009-Mar. 31, 2009

2.5%

564

Apr. 1, 2009-Jun. 30, 2009

1.5%

562

Jul. 1, 2009-Sep. 30, 2009

1.5%

562

Oct. 1, 2009-Dec. 31, 2009

1.5%

562

Jan. 1, 2010-Mar. 31, 2010

1.5%

562

Apr. 1, 2010-Jun. 30, 2010

1.5%

562

Jul. 1, 2010-Sep. 30, 2010

1.5%

562

Oct. 1, 2010-Dec. 31, 2010

1.5%

562

Jan. 1, 2011-Mar. 31, 2011

0.5%*

Apr. 1, 2011-Jun. 30, 2011

1.5%

562

Jul. 1, 2011-Sep. 30, 2011

1.5%

562

Oct. 1, 2011-Dec. 31, 2011

0.5%*

Jan. 1, 2012-Mar. 31, 2012

0.5%*

Apr. 1, 2012-Jun. 30, 2012

0.5%*

Jul. 1, 2012-Sep. 30, 2012

0.5%*

Oct. 1, 2012-Dec. 31, 2012

0.5%*

Jan. 1, 2013-Mar. 31, 2013

0.5%*

Apr. 1, 2013-Jun. 30, 2013

0.5%*

Jul. 1, 2013-Sep. 30, 2013

0.5%*

Oct. 1, 2013-Dec. 31, 2013

0.5%*

Jan. 1, 2014-Mar. 31, 2014

0.5%*

Apr. 1, 2014-Jun. 30, 2014

0.5%*

Jul. 1, 2014-Sep. 30, 2014

0.5%*

Oct. 1, 2014-Dec. 31, 2014

0.5%*

Jan. 1, 2015-Mar. 31, 2015

0.5%*

Apr. 1, 2015-Jun. 30, 2015

0.5%*

Jul. 1, 2015-Sep. 30, 2015

0.5%*

Oct. 1, 2015-Dec. 31, 2015

0.5%*

Jan. 1, 2016-Mar. 31, 2016

0.5%*

* The asterisk reflects the interest factors for daily compound interest for annual rates of 0.5 percent are published in Appendix A of this Revenue Ruling.

# Part III. Administrative, Procedural, and Miscellaneous

## 2015 Cumulative List of Changes in Plan Qualification Requirements Notice 2015-84

### I. PURPOSE

This notice contains the 2015 Cumula-
tive List of Changes in Plan Qualification
Requirements (2015 Cumulative List) de-
scribed in section 4 of Rev. Proc. 2007-
44, 2007-2 C.B. 54. The 2015 Cumulative
List is to be used by plan sponsors and
practitioners submitting determination let-
ter applications for plans during the period
beginning February 1, 2016 and ending
January 31, 2017.

Plans using this Cumulative List will
primarily be single employer individually
designed defined contribution plans and
single employer individually designed de-
fined benefit plans that are in Cycle A.
Generally an individually designed plan is
in Cycle A if the last digit of the employer
identification number of the plan sponsor
is 1 or 6.

The list of changes in section IV of this
notice does not extend the deadline by
which a plan must be amended to comply
with any statutory, regulatory, or guidance
changes. The general deadline for timely
adoption of an interim or discretionary
amendment can be found in section 5.05
of Rev. Proc. 2007-44.

### II. BACKGROUND

Rev. Proc. 2007-44 sets forth proce-
dures for issuing opinion, advisory, and
determination letters and describes the
five-year remedial amendment cycle for
individually designed plans and the six-
year remedial amendment cycle for pre-
approved plans. In addition, section 5.05
of Rev. Proc. 2007-44 provides the dead-
line for timely adoption of an interim
amendment or discretionary amendment.

Under section 4 of Rev. Proc. 2007-
44, the Internal Revenue Service (the Ser-
vice) announced its intention to annually
publish a Cumulative List to identify stat-

utory, regulatory, and guidance changes
that must be taken into account in submis-
sions by plan sponsors to the Service re-
questing opinion, advisory, and determi-
nation letters whose submission period
begins on February 1st following issuance
of the Cumulative List.

In Notice 2014-77, 2014-52 I.R.B.
974, the Service published the 2014 Cu-
mulative List of Changes in Plan Qualifi-
cation Requirements (2014 Cumulative
List).1

#### III. APPLICATION OF 2015 CUMULATIVE LIST

This notice relates to the determination
letter program for individually designed
plans eligible for Cycle A. In accordance
with Rev. Proc. 2007-44, the Service will
start accepting determination letter appli-
cations for Cycle A individually designed
plans beginning on February 1, 2016. The
12-month submission period for Cycle A
plans will end on January 31, 2017.

The 2015 Cumulative List, set forth in
section IV of this notice, informs plan
sponsors of issues the Service has specif-
ically identified for review in determining
whether a plan filing in Cycle A has been
properly updated. Specifically, the 2015
Cumulative List reflects law changes un-
der the Pension Protection Act of 2006
(PPA '06), Pub. L. 109-280; the Worker,
Retiree, and Employer Recovery Act of
2008 (WRERA), Pub. L. 110-458; the
Small Business Jobs Act of 2010 (SBJA),
Pub. L. 111-240; the Preservation of Ac-
cess to Care for Medicare Beneficiaries
and Pension Relief Act of 2010 (PRA
2010), Pub. L. No. 111-192; the Moving
Ahead for Progress in the 21st Century
Act (MAP-21), Pub. L. 112-141; the
American Taxpayer Relief Act of 2012
(ATRA), Pub. L. 112-240; the Highway
and Transportation Funding Act of 2014
(HATFA), Pub. L. No. 113-159; the Co-
operative and Small Employer Charity
Pension Flexibility Act (CSEC Act), Pub.
L. 113-97; the Consolidated and Further
Continuing Appropriations Act, 2015,
Pub. L. No. 113-235; and the Surface

Transportation and Veterans Health Care
Choice Improvement Act of 2015, Pub. L.
114-41.

Except as provided below, the Service
will not consider in its review of any
determination letter application for the
submission period that begins February 1,
2016, any:

(1) guidance issued after October 1, 2015;

(2) statutes enacted after October 1, 2015;

(3) qualification requirements first effec-
tive in 2017 or later;

(4) statutory provisions that are first effec-
tive in 2016, for which there is no guid-
ance identified in this notice; or

(5) proposed regulations or other guidance
described solely in any footnote in this
notice.

However, in order to be qualified, a
plan must comply with all relevant quali-
fication requirements, not just those on the
2015 Cumulative List.

Terminating plans must include all law
changes in effect at the time of termina-
tion. See section 8 of Rev. Proc. 2007-44
regarding plan termination.

### IV. 2015 CUMULATIVE LIST OF CHANGES IN PLAN QUALIFICATION REQUIREMENTS

The following list consists of statutory
provisions and associated guidance that
reflect changes to plan qualification re-
quirements. The Service has identified be-
low the plan qualification requirements
that differ from those that were on the
2014 or earlier Cumulative Lists as
"(New)."

Items from the 2010 Cumulative List
have been deleted from the 2015 Cumu-
lative List. Thus, the 2015 Cumulative
List contains the plan qualification re-
quirements in the 2011, 2012, 2013 and
2014 Cumulative Lists, as well as addi-
tional 2015 plan qualification require-
ments. The deletions have been made to
enhance the utility of the cumulative list,
by removing items that would have been
previously reviewed in the case of a plan
that was submitted during the second Cy-
cle A submission period (February 1,

1For previous cumulative lists, see Notice 2013-84, 2013-52 I.R.B. 822; Notice 2012-76, 2012-52 I.R.B. 775; Notice 2011-97, 2011-52 I.R.B. 923; Notice 2010-90, 2010-52 I.R.B. 909;
Notice 2009-98, 2009-52 I.R.B. 974; Notice 2008-108, 2008-2 C.B. 1275; Notice 2007-94, 2007-2 C.B. 1179; Notice 2007-3, 2007-1 C.B. 255; Notice 2005-101, 2005-2 C.B. 1219;
and Notice 2004-84, 2004-2 C.B. 1030.

2011 - January 31, 2012). However, if a
plan has not been previously reviewed for
items on earlier cumulative lists, the items
from the earlier cumulative lists must be
taken into account. These items can be
found in the 2010 Cumulative List, Notice
2010-90, 2010-52 I.R.B. 909.

### 1. 401(a):

· Rev. Rul. 2011-1, 2011-2 I.R.B. 251,
revises the generally applicable rules
for group trusts and, if certain require-
ments are met, permits the participa-
tion in group trusts of custodial ac-
counts under § 403(b)(7), retirement
income accounts under § 403(b)(9),
and governmental retiree benefit plans
under § 401(a)(24). This revenue rul-
ing also modifies the transition relief
provided in Rev. Rul. 2008-40. (2011
C. L.)

· Notice 2012-6, 2012-3 I.R.B. 293,
extends and expands the transition re-
lief provided under Rev. Rul. 2011-1
for certain group trusts, certain retire-
ment trusts that qualify under the
Puerto Rico Internal Revenue Code
that participate in group trusts, and cer-
tain qualified retirement plans that
benefit Puerto Rico residents. The no-
tice also provides additional time for
governmental retiree benefit plans de-
scribed in § 401(a)(24) to be amended
to satisfy the applicable requirements
of Rev. Rul. 2011-1. (2012 C. L.)

· Notice 2012-29, 2012-18 I.R.B. 872,
provides that the Service and Treasury
intend to modify the normal retirement
age regulations to clarify that govern-
mental plans that do not provide for
in-service distributions before age 62
do not need to have a definition of
normal retirement age and to modify
the age-50 safe harbor rule for quali-
fied public safety employees. The no-
tice also provides that the Service and
Treasury intend to amend the normal
retirement age regulations to extend
the effective date for governmental
plans to annuity starting dates that oc-
cur in plan years beginning on or after
the later of (1) January 1, 2015 or (2)
the close of the first regular legislative

session of the legislative body with the
authority to amend the plan that begins
on or after the date that is 3 months
after the final regulations are published
in the Federal Register. (2012 C. L.)

· United States v. Windsor, 570 U.S.
__ , 133 S. Ct. 2675 (2013). The Su-
preme Court found that Section 3 of
the Defense of Marriage Act
(DOMA), which provides that in de-
termining the meaning of any Act of
Congress, or of any ruling, regulation,
or interpretation of the various admin-
istrative bureaus and agencies of the
United States, the word 'marriage'
means only a legal union between one
man and one woman as husband and
wife, and the word 'spouse' refers only
to a person of the opposite sex who is
a husband or a wife, is unconstitutional
because it violates the principles of
equal protection. (2013 C. L.)

· Rev. Rul. 2013-17, 2013-38 I.R.B.
201, provides that for Federal tax pur-
poses, the terms "spouse," "husband
and wife," "husband," and "wife" in-
clude an individual married to a person
of the same sex if the individuals are
lawfully married under state law, and
the term "marriage" includes such a
marriage between individuals of the
same sex and the Service adopts a gen-
eral rule recognizing a marriage of
same-sex individuals that was validly
entered into in a state whose laws au-
thorize the marriage of two individuals
of the same sex even if the married
couple is domiciled in a state that does
not recognize the validity of same-sex
marriages. (2013 C. L.)

· Rev. Rul. 2014-9, 2014-17 I.R.B.
975, provides procedures a plan ad-
ministrator may use in order to reason-
ably conclude that an amount is a valid
rollover contribution. (2014 C.L.)

· Notice 2014-19, 2014-17 I.R.B. 979,
provides guidance on the application
(including the retroactive application)
of the decision in United States v.
Windsor, and the holdings of Rev. Rul.
2013-17, to retirement plans qualified
under § 401(a). (2014 C.L.)2

· Rev. Rul. 2014-24, 2014-37 I.R.B.
529, modifies the list of group trust
retiree benefit plans eligible to partic-
ipate in group trusts described in Rev.
Rul. 81-100, as modified by Rev. Rul.
2011-1 and Notice 2012-6, to include
trusts of certain retirement plans qual-
ified only under the Puerto Rico Code,
clarifies that assets held by certain sep-
arate accounts maintained by insur-
ance companies may be invested in
those group trusts, and provides lim-
ited transition relief. (2014 C.L.)

2\. 401(a)(4):

· Notice 2014-5, 2014-2 I.R.B. 276,
provides temporary nondiscrimination
relief for certain "closed" defined ben-
efit pension plans. (2014 C.L.)

· Notice 2014-66, 2014-46 I.R.B. 820,
provides a special nondiscrimination
rule for a qualified defined contribu-
tion plan that provides lifetime income
by offering, as investment options, a
series of target date funds (TDFs) that
include deferred annuities among their
assets, even if some of the TDFs
within the series are available only to
older participants. (2014 C.L.)

· Notice 2015-28, 2015-14 I.R.B. 848,
extends the temporary nondiscrimina-
tion relief previously established in
Notice 2014-5 for certain "closed" de-
fined benefit pension plans. (New)

3\. 401(a)(9):

· Final regulations that provide a limited
modification of the required minimum
distribution rules for tax-qualified de-
fined contribution plans holding qual-
ifying longevity annuity contracts
were published on July 2, 2014 (79
Fed. Reg. 37633). (2014 C.L.)

· Notice 2015-49, 2015-30 I.R.B. 79,
informs taxpayers that the Treasury
Department and the IRS intend to pro-
pose amendments to the required min-
imum distribution regulations under
§ 401(a)(9) to address the use of lump
sum payments to replace annuity pay-
ments being paid by a qualified de-
fined benefit pension plan and that
these amendments are intended to ap-

2Retirement plans qualified under § 401(a) were required to recognize marriages of same-sex couples pursuant to United States v. Windsor, 570 U.S. _ , 133 S. Ct. 2675 (2013) and Notice
2014-19. Notice 2015-86, which will appear in 2015-52 I.R.B, provides that qualified retirement plans are not required to make additional changes as a result of the decision in Obergefell
v. Hodges, 576 U.S ._ , 135 S. Ct. 2584 (2015). However, a plan sponsor may decide to amend its plan following Obergefell to make certain discretionary amendments (also described
in Notice 2015-86).

ply as of July 9, 2015 except with
respect to certain accelerations of an-
nuity payments described in the notice.
(New)

### 4. 401(a)(22):

· Notice 2011-19, 2011-11 I.R.B. 550,
provides that the terms readily tradable
on an established securities market and
readily tradable on an established mar-
ket mean employer securities that are
readily tradable on an established se-
curities market within the meaning of
§ 1.401(a)(35)-1(f)(5) for purposes of
§ 401(a)(22). Notice 2011-19 is effec-
tive for plan years that begin on or
after January 1, 2012, except for cer-
tain plans that have a delayed effective
date. (2011 C. L.)

5\. 401(a)(28)(C):

· Notice 2011-19 provides that the
terms readily tradable on an estab-
lished securities market and readily
tradable on an established market
mean employer securities that are
readily tradable on an established se-
curities market within the meaning of
§ 1.401(a)(35)-1(f)(5) for purposes of
§ 401(a)(28)(C). Notice 2011-19 is ef-
fective for plan years that begin on or
after January 1, 2012, except for cer-
tain plans that have a delayed effective
date. (2011 C. L.)

### 6. 401(a)(35):

· Notice 2013-17, 2013-20 I.R.B.
1082, provides relief from anti-
cutback rules for an amendment to an
ESOP that becomes subject to the di-
versification requirements of
§ 401(a)(35) to eliminate all in-service
distribution options previously used to
satisfy the diversification requirements
of § 401(a)(28)(B)(i). (2013 C. L.)

7\. 401(k) & 401(m):

· Final regulations that provide guid-
ance on permitted mid-year reductions
or suspensions of safe harbor nonelec-
tive contributions in certain circum-
stances for amendments adopted after
May 18, 2009 and revise the require-

ments for permitted mid-year reduc-
tions or suspensions of safe harbor
matching contributions for plan years
beginning on or after January 1, 2015
were published on November 15, 2013
(78 Fed. Reg. 68735). (2013 C. L.)

· Notice 2014-37, 2014-24 I.R.B.
1100, provides guidance on a mid-year
amendment to a § 401(k) safe harbor
plan or § 401(m) safe harbor plan to
reflect the outcome of United States v.
Windsor, pursuant to Notice 2014-19.
(2014 C.L.)

8\. 402(a):

· Final regulations clarifying the rules
regarding the tax treatment of pay-
ments by qualified retirement plans for
accident or health insurance were pub-
lished on May 12, 2014 (79 Fed. Reg.
26838). (2014 C.L.)

9\. 402(c)(2):

· Notice 2014-54, 2014-41 I.R.B. 670,
provides rules for allocating pretax
and after-tax amounts among dis-
bursements that are made to multiple
destinations from a qualified plan de-
scribed in § 401(a). (2014 C.L.)

10\. 402A:

· ATRA § 902 added § 402A(c)(4)(E),
which provides that rollovers from a
plan account to the plan's designated
Roth account can include a rollover of
an otherwise nondistributable amount.
(2013 C. L.)

· Notice 2013-74 provides guidance re-
garding § 402A(c)(4)(E) and also pro-
vides guidance that applies to all in-
plan Roth rollovers under
§ 402A(c)(4). (2013 C. L.)

· Notice 2014-54, 2014-41 I.R.B. 670,
provides rules for allocating pretax
and after-tax amounts among dis-
bursements that are made to multiple
destinations under tax-favored retire-
ment plans. (2014 C.L.)

· Proposed regulations under § 402A
were published on September 19,
2014 (79 Fed. Reg. 56310) with re-
spect to the tax treatment of distribu-
tions from designated Roth accounts

under tax-favored retirement plans.
(2014 C.L.)

11\. 409:

· Notice 2011-19 provides that the
terms readily tradable on an estab-
lished securities market and readily
tradable on an established market
mean employer securities that are
readily tradable on an established se-
curities market within the meaning of
§ 1.401(a)(35)-1(f)(5) for purposes of
§ 409(h)(1)(B) and § 409(l). Notice
2011-19 is effective for plan years that
begin on or after January 1, 2012, ex-
cept for certain plans that have a de-
layed effective date. (2011 C. L.)

12\. 411(a):

· Rev. Rul. 2012-4, 2012-8 I.R.B. 386,
describes whether a qualified defined
benefit pension plan that accepts a di-
rect rollover of an eligible rollover dis-
tribution from a qualified defined con-
tribution plan maintained by the same
employer satisfies §§ 411 and 415 in a
case in which the defined benefit plan
provides an annuity resulting from the
direct rollover. (2012 C. L.)

#### 13. 411(a)(13):3

· Notice 2011-85, 2011-44 I.R.B. 605,
extends the deadline for adopting an
interim or discretionary amendment
under § 411(a)(13) (other than
§ 411(a)(13)(A)). (2011 C. L.)

· Notice 2012-61, 2012-42 I.R.B. 479,
provides that certain provisions in the
2010 final hybrid plan regulations will
not be effective for plan years begin-
ning before January 1, 2014. (2012
C. L.)

14\. 411(b)(1):

· Final regulations under § 411(b)(1)
with respect to a variable interest cred-
iting rate that potentially can be nega-
tive in any given year were published
on September 19, 2014 (79 Fed. Reg.
56442). (2014 C.L.)

3 Amendments to the final regulations under § 411(a)(13) (which final regulations were included in the 2010 C. L.) were published on September 19, 2014 (79 Fed. Reg. 56442) and November
16, 2015 (80 Fed. Reg. 70680). Pursuant to the 2015 amendments, the provisions included in the 2014 and 2015 amendments to the regulations generally apply for plan years beginning
on or after January 1, 2017. Neither of these amendments to the regulations is included in the 2015 Cumulative List. Proposed regulations under § 411(a)(13) were published on October
19, 2010 (75 Fed. Reg. 64197) and can be relied upon until the 2014 and 2015 amendments to the regulations under § 411(a)(13) apply.

### 15. 411(b)(5):4

· Notice 2011-85 announces that the
Treasury Department and the Service
intend to amend the 2010 final hy-
brid plan regulations to postpone
the effective/applicability date of
§ 1.411(b)(5)-1(d)(1)(iii), (d)(1)(vi),
and (d)(6)(i) to plan years that begin
on or after a date to be specified in
those regulations that is not earlier
than January 1, 2013. This notice
also extends the deadline for adopting
an interim or discretionary amendment
under § 411(b)(5). (2011 C. L.)

· Notice 2012-61 provides that certain
provisions in the 2010 final hybrid
plan regulations will not be effective
for plan years beginning before Janu-
ary 1, 2014. (2012 C. L.)

### 16. 411(d)(6):

· Final Regulations under § 411(d)(6),
which provide an additional limited
exception to the anti-cutback rules in
the case of a plan sponsor who is a
debtor in a bankruptcy proceeding,
were published on November 8, 2012
(77 Fed. Reg. 66915). (2012 C. L.)

· Notice 2013-17 provides relief from
anti-cutback rules for an amendment
to an ESOP to eliminate all in-service
distribution options previously used to
satisfy the diversification requirements
of § 401(a)(28)(B)(i). (2013 C. L.)

17\. 411(f):

. Division P of the Consolidated and
Further Continuing Appropriations
Act, 2015, Pub. L. No. 113-235, sec-
tion 2 adds § 411(f) which provides a
special rule for determining normal re-
tirement age for certain existing de-
fined benefit plans. (New)

### 18. 415:

· Rev. Rul. 2012-4 describes whether a
qualified defined benefit pension plan
that accepts a direct rollover of an el-
igible rollover distribution from a
qualified defined contribution plan

maintained by the same employer sat-
isfies §§ 411 and 415 in a case in
which the defined benefit plan pro-
vides an annuity resulting from the
direct rollover. (2012 C. L.)

· Proposed regulations under § 415
were published on November 15, 2013
(78 Fed. Reg. 68780) with respect to
amounts paid to an Indian tribe mem-
ber as remuneration for services per-
formed in a fishing rights-related ac-
tivity. (2014 C.L.)

19\. 417:

· Rev. Rul. 2012-3, 2012-6 I.R.B. 383,
describes how the qualified joint and
survivor annuity ("QJSA)") and the
qualified preretirement survivor annu-
ity ("QPSA") rules, described in
§§ 401(a)(11) and 417, apply when a
deferred annuity contract is purchased
under a profit sharing plan. (2012
C. L.)

20\. 420:

· MAP-21 §§ 40241 and 40242 amend
§ 420 to extend the provisions relating
to transfers of excess pension assets to
retiree health accounts and to expand
those provisions to allow transfers to
retiree group term life insurance ac-
counts. (2012 C. L.)

· Section 2007 of the Surface Transpor-
tation and Veterans Health Care
Choice Improvement Act of 2015
amends § 420 to extend the provisions
relating to transfers to December 31,
2025. (New)

21\. 431(b)(8):

· PRA 2010 § 211(a)(2) added
§ 431(b)(8), which provides two spe-
cial funding rules available to mul-
tiemployer plans. (2011 C. L.)

· Notice 2010-83, 2010-51 I.R.B. 862,
provides guidance with respect to the
special funding rules under
§ 431(b)(8). (2011 C. L.)

22\. 432(e)(9):

· Section 432(e)(9), as amended by the
Multiemployer Pension Reform Act of
2014 (MPRA), contained in Division
O of the Consolidated and Further
Continuing Appropriations Act, 2015,
Pub. L. No. 113-235, permits plan
sponsors of multiemployer plans to
suspend benefits if certain conditions
are satisfied. (New)

· Temporary regulations provide guid-
ance to enable plan sponsors of mul-
tiemployer plans to suspend benefits if
certain conditions are satisfied (80
Fed. Reg. 35207) (New)5

23\. 436:6

· Section 1.436-1 provides guidance on
the application of § 436, which pro-
vides a series of limitations on the ac-
crual and payment of benefits under
underfunded single employer defined
benefit plans. (2012 C. L.)

· Notice 2011-3, 2011-2 I.R.B. 263,
provides guidance on the special rules
relating to the relaxation of § 436 rules
that were included in the funding relief
for single employer defined benefit
pension plans under PRA 2010. (2012
C. L.)

· Notice 2011-96, 2011-52 I.R.B. 915,
provides a sample plan amendment
that plan sponsors may adopt to satisfy
§ 436 regarding limitations on the ac-
crual and payment of benefits. The no-
tice also extends both the deadline to
amend a plan to satisfy § 436 and the
period during which such an amend-
ment is eligible for relief from the anti-
cutback requirements of § 411(d)(6).
(2012 C. L.)

· Notice 2012-70, 2012-51 I.R.B. 712,
extends the deadline, as set forth in
Notice 2011-96, to amend a defined
benefit plan to satisfy the requirements
of § 436 and provides associated relief
from the requirements of § 411(d)(6).
(2012 C. L.)

· CSEC Act § 202 exempted certain co-
operative and small employer charity

4 Amendments to the final regulations under § 411(b)(5) (which final regulations were included in the 2010 C. L.) were published on September 19, 2014 (79 Fed. Reg. 56442) and November
16, 2015 (80 Fed. Reg. 70680). Pursuant to the 2015 amendments, the provisions included in the 2014 and 2015 amendments to the regulations generally apply for plan years beginning
on or after January 1, 2017. Neither of these amendments to the regulations is included in the 2015 Cumulative List. Proposed regulations under § 411(b)(5) were published on October
19, 2010 (75 Fed. Reg. 64197) and can be relied upon until the 2014 and 2015 amendments to the regulations under § 411(b)(5) apply.

5See also temporary regulations providing guidance relating to the administration of the required vote of participants to approve a suspension of benefits (80 Fed. Reg. 52972).

6Notice 2012-61 and Notice 2014-53, 2014-43 I.R.B.737, provide guidance on the application of MAP-21 and HATFA. Notice 2012-55, 2012-36 I.R.B. 332, and Notice 2013-11,
2013-11 I.R.B. 610, provide guidance on the 25-year average segment rates under MAP-21.

pension plans from the limitations of
§§ 436 and 401(a)(33), and provided
new funding rules for these plans.
(2014 C.L.)

The following guidance contains sam-
ple or model amendments: Rev. Rul.
2011-1 (group trusts); and Notice
2011-96 (limitations on the accrual and
payment of benefits under underfunded
single employer defined benefit plans).

## DRAFTING INFORMATION

The principal author of this notice is
Maxine Terry of the Office of Associate Chief
Counsel (Tax Exempt and Government Enti-
ties). For further information regarding this
announcement, contact Ms. Terry at (202)
317-4102 (not a toll-free number).

## Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

## Notice 2015-85

This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used un-
der § 417(e)(3), and the 24-month average
segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this

notice provides guidance as to the interest
rate on 30-year Treasury securities under
§ 417(e)(3)(A)(ii)(II) as in effect for plan
years beginning before 2008 and the 30-
year Treasury weighted average rate un-
der § 431(c)(6)(E)(ii)(I).

## YIELD CURVE AND SEGMENT RATES

Generally, except for certain plans under
sections 104 and 105 of the Pension Protec-
tion Act of 2006 and CSEC plans under
§ 414(y), § 430 of the Code specifies the
minimum funding requirements that apply
to single-employer plans pursuant to § 412.
Section 430(h)(2) specifies the interest rates
that must be used to determine a plan's
target normal cost and funding target. Under
this provision, present value is generally de-
termined using three 24-month average in-
terest rates ("segment rates"), each of which
applies to cash flows during specified peri-
ods. To the extent provided under
§ 430(h)(2)(C)(iv), these segment rates are
adjusted by the applicable percentage of the
25-year average segment rates for the period
ending September 30 of the year preceding
the calendar year in which the plan year
begins.1 However, an election may be made
under § 430(h)(2)(D)(ii) to use the monthly
yield curve in place of the segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and the

24-month average corporate bond segment
rates used to compute the target normal cost
and the funding target. Consistent with the
methodology specified in Notice 2007-81,
the monthly corporate bond yield curve de-
rived from November 2015 data is in Table
I at the end of this notice. The spot first,
second, and third segment rates for the
month of November 2015 are, respectively,
1.76, 4.15, and 5.13.

The 24-month average segment rates
determined under § 430(h)(2)(C)(i)
through (iii) must be adjusted pursuant to
§ 430(h)(2)(C)(iv) to be within the appli-
cable minimum and maximum percent-
ages of the corresponding 25-year average
segment rates. For plan years beginning
before 2018, the applicable minimum per-
centage is 90% and the applicable maxi-
mum percentage is 110%. The 25-year
average segment rates for plan years be-
ginning in 2014, 2015, and 2016 were
published in Notice 2013-58, 2013-40
I.R.B. 294, Notice 2014-50, 2014-40
I.R.B. 590, and Notice 2015-61, 2015-39
I.R.B. 408, respectively.

## 24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate
bond segment rates applicable for Decem-
ber 2015 without adjustment for the 25-
year average segment rate limits are as
follows:

Applicable Month

First Segment

Second Segment

Third Segment

December 2015

1.39

3.98

5.00

Based on § 430(h)(2)(C)(iv), the 24-
2015 adjusted to be within the applicable
minimum and maximum percentages of

the corresponding 25-year average seg-
ment rates, are as follows:

month averages applicable for December

For Plan Years Beginning In

Adjusted 24-Month Average Segment Rates

Applicable Month

First Segment

Second Segment

Third Segment

2014

December

2015

4.99

6.32

6.99

2015

December

2015

4.72

6.11

6.81

2016

December

2015

4.43

5.91

6.65

1Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).

# 30-YEAR TREASURY SECURITIES INTEREST RATES

Generally for plan years beginning af-
ter 2007, § 431 specifies the minimum
funding requirements that apply to mul-
tiemployer plans pursuant to § 412. Sec-
tion 431(c)(6)(B) specifies a minimum
amount for the full-funding limitation
described in § 431(c)(6)(A), based on
the plan's current liability. Section
431(c)(6)(E)(ii)(I) provides that the inter-
est rate used to calculate current liability

for this purpose must be no more than 5
percent above and no more than 10 per-
cent below the weighted average of the
rates of interest on 30-year Treasury se-
curities during the four-year period ending
on the last day before the beginning of the
plan year. Notice 88-73, 1988-2 C.B.
383, provides guidelines for determining
the weighted average interest rate. The
rate of interest on 30-year Treasury secu-
rities for November 2015 is 3.03 percent.
The Service determined this rate as the
average of the daily determinations of

yield on the 30-year Treasury bond ma-
turing in August 2045 determined each
day through November 10, 2015 and the
yield on the 30-year Treasury bond ma-
turing in November 2045 determined each
day for the balance of the month. For plan
years beginning in the month shown be-
low, the weighted average of the rates of
interest on 30-year Treasury securities and
the permissible range of rate used to cal-
culate current liability are as follows:

For Plan Years Beginning in

30-Year Treasury Weighted Average

Permissible Range

Month

Year

90%

105%

December

2015

3.13

2.81

3.28

# MINIMUM PRESENT VALUE SEGMENT RATES

In general, the applicable interest rates
under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month
average. Notice 2007-81 provides guide-
lines for determining the minimum pres-
ent value segment rates. Pursuant to that
notice, the minimum present value seg-

ment rates determined for November 2015
are as follows:

First Segment

Second Segment

Third Segment

1.76

4.15

5.13

# DRAFTING INFORMATION

The principal author of this notice is
Tom Morgan of the Office of the Associ-
ate Chief Counsel (Tax Exempt and Gov-
ernment Entities). However, other person-
nel from the IRS participated in the
development of this guidance. For further
information regarding this notice, contact
Mr. Morgan at 202-317-6700 or Tony
Montanaro at 202-317-8698 (not a toll-
free number).

Table I Monthly Yield Curve for November 2015 Derived from November 2015 Data

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

Maturity

Yield

0.5

0.53

20.5

4.86

40.5

5.17

60.5

5.27

80.5

5.33

1.0

0.94

21.0

4.88

41.0

5.17

61.0

5.28

81.0

5.33

1.5

1.31

21.5

4.89

41.5

5.17

61.5

5.28

81.5

5.33

2.0

1.60

22.0

4.90

42.0

5.18

62.0

5.28

82.0

5.33

2.5

1.83

22.5

4.91

42.5

5.18

62.5

5.28

82.5

5.33

3.0

2.00

23.0

4.93

43.0

5.19

63.0

5.28

83.0

5.33

3.5

2.14

23.5

4.94

43.5

5.19

63.5

5.29

83.5

5.34

4.0

2.28

24.0

4.95

44.0

5.19

64.0

5.29

84.0

5.34

4.5

2.41

24.5

4.96

44.5

5.20

64.5

5.29

84.5

5.34

5.0

2.55

25.0

4.97

45.0

5.20

65.0

5.29

85.0

5.34

5.5

2.69

25.5

4.98

45.5

5.20

65.5

5.29

85.5

5.34

6.0

2.83

26.0

4.99

46.0

5.21

66.0

5.29

86.0

5.34

6.5

2.98

26.5

4.99

46.5

5.21

66.5

5.29

86.5

5.34

7.0

3.13

27.0

5.00

47.0

5.21

67.0

5.30

87.0

5.34

7.5

3.27

27.5

5.01

47.5

5.21

67.5

5.30

87.5

5.34

8.0

3.41

28.0

5.02

48.0

5.22

68.0

5.30

88.0

5.34

8.5

3.55

28.5

5.03

48.5

5.22

68.5

5.30

88.5

5.34

9.0

3.68

29.0

5.04

49.0

5.22

69.0

5.30

89.0

5.35

9.5

3.80

29.5

5.04

49.5

5.23

69.5

5.30

89.5

5.35

10.0

3.91

30.0

5.05

50.0

5.23

70.0

5.30

90.0

5.35

10.5

4.01

30.5

5.06

50.5

5.23

70.5

5.31

90.5

5.35

11.0

4.11

31.0

5.07

51.0

5.23

71.0

5.31

91.0

5.35

11.5

4.20

31.5

5.07

51.5

5.24

71.5

5.31

91.5

5.35

12.0

4.28

32.0

5.08

52.0

5.24

72.0

5.31

92.0

5.35

12.5

4.35

32.5

5.09

52.5

5.24

72.5

5.31

92.5

5.35

13.0

4.41

33.0

5.09

53.0

5.24

73.0

5.31

93.0

5.35

13.5

4.47

33.5

5.10

53.5

5.25

73.5

5.31

93.5

5.35

14.0

4.52

34.0

5.10

54.0

5.25

74.0

5.31

94.0

5.35

14.5

4.57

34.5

5.11

54.5

5.25

74.5

5.32

94.5

5.35

15.0

4.61

35.0

5.11

55.0

5.25

75.0

5.32

95.0

5.35

15.5

4.64

35.5

5.12

55.5

5.25

75.5

5.32

95.5

5.36

16.0

4.68

36.0

5.12

56.0

5.26

76.0

5.32

96.0

5.36

16.5

4.71

36.5

5.13

56.5

5.26

76.5

5.32

96.5

5.36

17.0

4.73

37.0

5.13

57.0

5.26

77.0

5.32

97.0

5.36

17.5

4.76

37.5

5.14

57.5

5.26

77.5

5.32

97.5

5.36

18.0

4.78

38.0

5.14

58.0

5.27

78.0

5.32

98.0

5.36

18.5

4.80

38.5

5.15

58.5

5.27

78.5

5.33

98.5

5.36

19.0

4.82

39.0

5.15

59.0

5.27

79.0

5.33

99.0

5.36

19.5

4.83

39.5

5.16

59.5

5.27

79.5

5.33

99.5

5.36

20.0

4.85

40.0

5.16

60.0

5.27

80.0

5.33

100.0

5.36

# Application of Obergefell to Qualified Retirement Plans and Health and Welfare Plans

Notice 2015-86

## I. PURPOSE

This notice provides guidance on the
application of the decision in Obergefell v.
Hodges, 576 U.S. __ , 135 S.Ct. 2584
(2015), to retirement plans qualified under
section 401(a) of the Internal Revenue
Code (Code) and to health and welfare
plans, including cafeteria plans under sec-
tion 125 of the Code. This guidance re-
lates solely to the application of federal
tax law with respect to same-sex spouses.

## II. BACKGROUND

### .01 Windsor and Impact on Employee Benefit Plans

Prior to the decision of the Supreme
Court in United States v. Windsor, 570
U.S. _ , 133 S.Ct. 2675 (2013), section 3
of the Defense of Marriage Act (DOMA),
1 U.S.C. § 7, prohibited recognition of
same-sex spouses for purposes of federal
tax law. As a result, same-sex spouses
who were married under applicable state
law were not recognized as spouses for
purposes of the federal tax rules that apply
because an individual is married, includ-
ing the rules that apply with respect to
employee benefit plans.

On June 26, 2013, the Supreme Court
held in Windsor that section 3 of DOMA
is unconstitutional. As a result of this de-
cision, marriages of same-sex spouses
were recognized for federal tax law pur-
poses. On August 29, 2013, the Depart-
ment of the Treasury (Treasury) and the
IRS issued Rev. Rul. 2013-17, 2013-38
I.R.B. 201. Among other issues addressed
in the ruling, Treasury and the IRS ad-
opted a general rule for federal tax pur-
poses recognizing a marriage of same-sex
couples that was validly entered into in a
state whose laws authorize the marriage of

two individuals of the same sex even if the
married couple is domiciled in a state that
does not recognize the validity of such
marriages. As a result of Windsor and
Rev. Rul. 2013-17, marriages of same-sex
spouses that were valid in the state where
they were entered into, including mar-
riages entered into in previous years, were
recognized for federal tax law purposes.1

Following Rev. Rul. 2013-17, Trea-
sury and the IRS issued the following
additional guidance addressing various
employee benefit and employment tax is-
sues (collectively referred to in this notice
as the Post-Windsor Guidance): Notice
2014-19, 2014-17 I.R.B. 979, amplified
by Notice 2014-37, 2014-24 I.R.B. 1100
(applying Windsor and Rev. Rul. 2013-17
to qualified retirement plans); Notice
2013-61, 2013-44 I.R.B. 432 (applying
Windsor and Rev. Rul. 2013-17 to em-
ployment taxes, including procedures for
adjustments or claims for refunds or cred-
its); and Notice 2014-1, 2014-02 I.R.B.
270 (applying Windsor and Rev. Rul.
2013-17 to elections and reimbursements
for same-sex spouses under cafeteria
plans, flexible spending arrangements,
and health savings accounts).2

#### .02 Limited Effect of Obergefell for Federal Tax Law Purposes

On June 26, 2015, the Supreme Court
held in Obergefell that the Fourteenth
Amendment (i) requires a state's civil
marriage laws to apply to same-sex cou-
ples "on the same terms and conditions as
opposite-sex couples," and (ii) prohibits a
state from refusing to "recognize a lawful
same-sex marriage performed in another
State on the ground of its same-sex char-
acter."3 Because Obergefell requires that
states recognize marriages of same-sex
couples performed in other states, certain
marriages performed in previous periods
will be recognized for the first time for
state law purposes. However, because
these same marriages have already been
recognized for federal tax law purposes
pursuant to Windsor and the Post-Windsor

Guidance, Treasury and the IRS do not
anticipate any significant impact from
Obergefell on the application of federal
tax law to employee benefit plans.

Treasury and the IRS understand, how-
ever, that some plan sponsors may alter
aspects of their employee benefit plans, or
how their plans are administered, in re-
sponse to Obergefell. In addition, some
plan sponsors have asked for clarification
of the application of Obergefell to certain
changes to employee benefit plans, such
as a discretionary expansion of benefits
that is not required under the federal tax
rules. The following questions and an-
swers provide guidance to address these
issues.

## III. QUESTIONS AND ANSWERS Qualified Retirement Plans

Q-1. For federal tax law purposes,
does Obergefell require that a sponsor of a
qualified retirement plan change the terms
or operation of its plan?

A-1. A qualified retirement plan is not
required to make additional changes as a
result of Obergefell. Q&A-8 of Notice
2014-19 required qualified retirement
plans to be amended to reflect Windsor
and Notice 2014-19 no later than Decem-
ber 31, 2014 (or a possible delayed
amendment deadline for governmental
plans, as described in Q&A-8 of Notice
2014-19). Thus, under Windsor and No-
tice 2014-19, any plan amendments re-
quired to recognize same-sex spouses and
their marriages with respect to the section
401(a) qualification requirements are al-
ready required to be adopted and effective
(subject to a possible delayed amendment
deadline for governmental plans). How-
ever, a plan sponsor may decide to amend
its plan following Obergefell to make cer-
tain optional changes or clarifications. Ex-
amples of discretionary amendments a
plan sponsor may decide to make to its
qualified retirement plan are described in
Q&A-2 and Q&A-3 of this notice.

Q-2. May a qualified retirement plan
be amended to provide new rights or ben-

1Individuals who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under
the laws of the state are not recognized as spouses for federal tax law purposes. See Rev. Rul. 2013-17.

2For further information regarding Windsor, Rev. Rul. 2013-17, and Notice 2014-19, see IRS FAQs on Application of the Windsor Decision and Post-Windsor Guidance to Qualified
Retirement Plans (http://www.irs.gov/Retirement-Plans/Application-of-the-Windsor-Decision-and-Post-Windsor-Published-Guidance-to-Qualified-Retirement-Plans-FAQs).

3On October 23, 2015, Treasury and the IRS published proposed regulations that reflect the holdings of Obergefell, Windsor, and Rev. Rul. 2013-17, and that define terms in the Code
describing the marital status of taxpayers. Definition of Terms Relating to Marital Status, 80 Fed. Reg. 64378 (Oct. 23, 2015).

efits with respect to participants with
same-sex spouses?

A-2. In response to Windsor, some
plan sponsors may have amended their
qualified retirement plans to provide new
rights or benefits with respect to partici-
pants with same-sex spouses in order to
make up for benefits or benefit options
that had not previously been available to
those participants.4 For example, such an
amendment may have provided partici-
pants who commenced a single life annu-
ity distribution prior to June 26, 2013 (the
date of the Windsor decision) with an op-
portunity to elect a qualified joint and
survivor annuity (QJSA) form of distribu-
tion as of a new annuity starting date.
Following Obergefell, some plan sponsors
might similarly decide to make discretion-
ary plan amendments to provide new rights
or benefits with respect to participants with
same-sex spouses. Plan sponsors are permit-
ted to make such amendments, which must
comply with the applicable qualification re-
quirements (such as the nondiscrimination
requirements of section 401(a)(4)).

Q-3. Q&A-3 of Notice 2014-19 pro-
vided that a qualified retirement plan
could be amended to recognize marriages
of same-sex couples on a retroactive basis
as of a date earlier than June 26, 2013, the
date of the Windsor decision. If a plan
sponsor did not make such a retroactive
amendment to its qualified retirement plan
following issuance of Notice 2014-19,
may the qualified retirement plan now be
amended to recognize marriages of same-
sex couples on a retroactive basis and only
for certain purposes as described in
Q&A-3 of Notice 2014-19?

A-3. In general, under Windsor and
Notice 2014-19, a retirement plan fails to
meet the applicable section 401(a) quali-
fication requirements (such as the quali-
fied joint and survivor requirements of
section 401(a)(11)) if it does not recog-
nize the same-sex spouse of a participant
as a spouse on and after June 26, 2013, the
date of the Windsor decision. However, a
plan will not lose its qualified status if it
also applies Windsor prior to June 26,
2013.5 A plan sponsor that has not yet
made such a retroactive amendment in

accordance with Notice 2014-19 may de-
cide to make such an amendment after this
notice is issued. Such an amendment will
not cause the plan to lose its qualified
status, provided the amendment otherwise
complies with Q&A-3 of Notice 2014-19
(for example, the amendment must com-
ply with applicable qualification require-
ments, such as section 401(a)(4)).

Q-4. Is an amendment to a single-
employer defined benefit plan that is in-
tended to respond to Obergefell or this
notice (for example, by extending certain
rights and benefits to a same-sex spouse)
subject to the requirements of section
436(c)?

A-4. In general, under section 436(c),
a discretionary amendment to a single-
employer defined benefit plan that in-
creases the liabilities of the plan cannot
take effect unless the plan's adjusted
funding target attainment percentage is
sufficient or the plan sponsor makes the
additional contribution specified under
section 436(c)(2). Because an amendment
that extends rights and benefits to a same-
sex spouse in response to Obergefell or
this notice (for example, an amendment
described in Q&A-2 or Q&A-3 of this
notice) is a discretionary expansion of
coverage, the amendment is subject to the
requirements of section 436(c).

Q-5. What is the deadline for the spon-
sor of a qualified retirement plan to adopt
a plan amendment pursuant to this notice,
such as an amendment described in
Q&A-2?

A-5. Amendments to a qualified retire-
ment plan that are contemplated by this
notice are not interim amendments within
the meaning of section 5.02 of Rev. Proc.
2007-44, or successor guidance, but are
discretionary amendments. Thus, pursuant
to section 5.05(2) of Rev. Proc. 2007-44,
the deadline to adopt a plan amendment
pursuant to this notice is generally the end
of the plan year in which the amendment
is operationally effective. However, pur-
suant to section 5.06(1) of Rev. Proc.
2007-44, in the case of a governmental
plan, the deadline for any amendment
made pursuant to this notice is the later of
(i) the end of the plan year in which the

amendment is operationally effective, or
(ii) the last day of the next regular legis-
lative session beginning after the amend-
ment is operationally effective in which
the governing body with authority to
amend the plan can consider a plan
amendment under the laws and proce-
dures applicable to the governing body's
deliberations.

### Health and Welfare Plans

Q-6. For federal tax law purposes,
does Obergefell require that a sponsor of a
health or welfare plan change the terms or
operation of its plan?

A-6. Federal tax law generally does
not require health and welfare plans to
offer any specific rights or benefits to the
spouse of a participant. To the extent that
a health or welfare plan does offer benefits
to the spouse of a participant, the federal
tax treatment of the benefits that are pro-
vided to a same-sex spouse has already
been addressed in Rev. Rul. 2013-17 and
Notice 2014-1. Accordingly, no changes
to the terms of a health or welfare plan are
required due to Obergefell.

If a health or welfare plan does offer
benefits to the spouse of a participant,
however, Obergefell could require
changes to the operation of the plan to the
extent that the decision results in a change
in the group of spouses eligible for cov-
erage under the terms of the plan. For
example, if the terms of a health or wel-
fare plan provide that coverage is offered
to the spouse of a participant as defined
under applicable state law, and the plan
administrator determines that applicable
state law has expanded to include same-
sex spouses as a result of Obergefell, then
the terms of the plan would require cov-
erage of same-sex spouses as of the date
of the change in applicable state law. See
Q&A-7 below for a discussion of election
changes under a section 125 cafeteria plan
under such circumstances.

Q-7. If, as of the beginning of a plan
year, a health or welfare plan that is of-
fered under a section 125 cafeteria plan
does not permit coverage of same-sex
spouses, and the terms or operation of the
plan change during the plan year to permit

4See, for example, FAQ-4 in IRS FAQs on Application of the Windsor Decision and Post-Windsor Guidance to Qualified Retirement Plans (http://www.irs.gov/Retirement-Plans/
Application-of-the-Windsor-Decision-and-Post-Windsor-Published-Guidance-to-Qualified-Retirement-Plans-FAQs).

5See Q&A-3 of Notice 2014-19.

coverage of same-sex spouses, may the
cafeteria plan permit a participant to re-
voke an existing election and submit a
new election?

A-7. Yes, if the terms of the cafeteria
plan allow (or, under Q&A-8 of this no-
tice, are amended to allow) a participant to
make a change in coverage due to a sig-
nificant improvement in coverage during
the coverage period under an existing cov-
erage option, then the participant may re-
voke an existing election and make a new
election as permitted under § 1.125-
4(f)(3)(iii). If the eligibility criteria for a
qualified benefit offered under a cafeteria
plan change during a plan year to add
eligibility for same-sex spouses, this
change constitutes a significant improve-
ment in coverage under an existing cov-
erage option for purposes of § 1.125-
4(f)(3)(iii). Such a change in eligibility
criteria could occur, for example, as a
result of an amendment to the terms of the
plan; a change in applicable state law (to
the extent the terms of the plan refer to
state law); or a change in the interpreta-
tion of the existing terms of the plan.

A cafeteria plan that allows partici-
pants to make a change in election due to
a significant improvement in coverage un-
der an existing coverage option may per-
mit a participant to revoke an existing
election and submit a new election if
same-sex spouses first become eligible for
coverage under the terms of the plan dur-
ing the period of coverage for any reason,
including but not limited to those listed in
the preceding paragraph. This new elec-
tion may be an election by a participant to
add coverage for a same-sex spouse to a
benefit option in which the participant is
already enrolled, or an election by a par-
ticipant who had not previously elected
coverage to add coverage for the partici-
pant and a same-sex spouse.

Q-8. If the terms of a cafeteria plan do
not allow participants to make a change in
election due to a significant improvement
in coverage during the coverage period

under an existing coverage option, may
the plan sponsor amend the terms of the
cafeteria plan to allow such an election?

A-8. Yes. The cafeteria plan may be
amended at any time to permit partici-
pants to make a change in election. In the
case of a change described in Q&A-7,
such an amendment must be adopted no
later than the last day of the plan year
including the later of (i) the date same-sex
spouses first became eligible for coverage
under the plan, or (ii) December 9, 2015.
Such an amendment may be retroactive to
the date same-sex spouses first became
eligible for coverage under the plan.

## IV. EFFECT ON OTHER DOCUMENTS

Notice 2014-19 is amplified.

## V. NO INFERENCE

No inference should be drawn from
this notice as to the application of any law
other than federal tax law, including the
application of any provisions of the Con-
stitution of the United States or Title VII
of the Civil Rights Act of 1964,6 to the
treatment of same-sex spouses under em-
ployee benefit plans.

## VI. DRAFTING INFORMATION

The principal authors of this notice are
Jeremy Lamb and Shad Fagerland of the
Office of Associate Chief Counsel (Tax
Exempt and Government Entities). For
further information regarding the qualified
retirement plan aspects of this notice, con-
tact Mr. Lamb at (202) 317-6799 (not a
toll-free number) and regarding the health
and welfare plan aspects of this notice,
contact Mr. Fagerland at (202) 317-5500
(not a toll-free number).

Further Guidance on the
Application of the Group
Health Plan Market Reform
Provisions of the Affordable
Care Act to Employer-
Provided Health Coverage
and on Certain Other
Affordable Care Act
Provisions

### Notice 2015-87

## I. PURPOSE AND OVERVIEW

This notice provides further guidance
on the application of various provisions of
the Affordable Care Act1 to employer-
provided health coverage. Part II of this
notice applies to provisions within the ju-
risdiction of the Treasury Department
(Treasury) and the Internal Revenue Ser-
vice (IRS), the Departments of Health and
Human Services (HHS), and Labor (DOL)
(collectively the Departments). Parts III
through VI of this notice apply only to
provisions of the Internal Revenue Code,
and accordingly the guidance on these
parts is provided solely by Treasury and
IRS. For purposes of this notice, refer-
ences to sections refer to sections of the
Internal Revenue Code unless otherwise
indicated.

Part II of this notice provides guidance
on the application of the market reforms2
that apply to group health plans under the
Affordable Care Act (the market reforms)
to various types of employer health care
arrangements. The notice covers, among
other health care arrangements: (1) health
reimbursement arrangements (HRAs), in-
cluding HRAs integrated with a group
health plan, and similar employer-funded
health care arrangements, and (2) group
health plans under which an employer re-
imburses an employee for some or all of
the premium expenses incurred for an in-
dividual health insurance policy, such as a
reimbursement arrangement described in

6Public Law 88-352, 78 Stat. 241.

"The "Affordable Care Act" refers to the Patient Protection and Affordable Care Act (enacted March 23, 2010, Pub. L. No. 111-148) (ACA), as amended by the Health Care and Education
Reconciliation Act of 2010 (enacted March 30, 2010, Pub. L. No. 111-152), and as further amended by the Department of Defense and Full-Year Continuing Appropriations Act, 2011
(enacted April 15, 2011, Pub. L. No. 112-10) and the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (enacted July 31, 2015, Pub. L. No. 114-41).

2Section 1001 of the ACA added new Public Health Service Act (PHS Act) §§ 2711-2719. Section 1563 of the ACA (as amended by ACA § 10107(b) added Code § 9815(a) and ERISA
§ 715(a) to incorporate the provisions of part A of title XXVII of the PHS Act into the Code and ERISA, and to make them applicable to group health plans and health insurance issuers
providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by these references are sections 2701 through 2728. Accordingly, these
referenced PHS Act sections (that is, the market reforms) are subject to shared interpretive jurisdiction by the Departments.

Revenue Ruling 61-146, 1961-2 CB 25,
or an arrangement under which the em-
ployer uses its funds to directly pay the
premium for an individual health insur-
ance policy covering the employee (col-
lectively, an employer payment plan).
This notice supplements the guidance pro-
vided in Notice 2013-54, 2013-40 IRB
287; FAQs about Affordable Care Act
Implementation (Part XXII) issued by the
Department of Labor on November 6,
2014; Notice 2015-17, 2015-14 IRB 845;
and final regulations implementing the
market reform provisions of the ACA
published in the Federal Register on No-
vember 18, 2015, 80 FR 72192. DOL and
HHS have reviewed Part II of this notice
and have advised Treasury and the IRS
that they agree with this guidance.

Part III of this notice clarifies certain
aspects of the employer shared responsi-
bility provisions of § 4980H, including the
identification of employee contributions
when employers offer HRAs, flex credits,
opt-out payments, or fringe benefit pay-
ments required under the McNamara-
O'Hara Service Contract Act or other sim-
ilar laws, the application of the adjusted
9.5 percent affordability threshold under
§ 36B(c)(2)(i)(II) to the safe harbor pro-
visions under § 4980H, and the employer
status of certain entities for § 4980H pur-
poses.

Part IV of this notice clarifies certain
aspects of the application to government
entities of § 4980H, the information re-
porting provisions for applicable large
employers under § 6056, and application
of the rules for health savings accounts
(HSAs) to persons eligible for benefits
administered by the Department of Veter-
ans Affairs (VA).

Part V of this notice clarifies the appli-
cation of the COBRA continuation cover-
age rules to unused amounts in a health
flexible spending arrangement (health
FSA) carried over and available in later
years pursuant to Notice 2013-71,
2013-47 IRB 532, and conditions that
may be put on the use of carryover
amounts.

Part VI of this notice addresses relief
from penalties under §§ 6721 and 6722
that has been provided for employers that

make a good faith effort to comply with
the requirements under § 6056 to report
information about offers made in calendar
year 2015.

### II. FURTHER GUIDANCE ON THE APPLICATION OF THE GUIDANCE UNDER NOTICE 2013- 54 (APPLICATION OF THE MARKET REFORMS TO EMPLOYER PAYMENT PLANS)

### A. Further Guidance on the Application of the Guidance under Notice 2013-54 to HRAs

Question 1: May an HRA that covers
fewer than two participants who are cur-
rent employees be used to purchase indi-
vidual market coverage after an employee
covered by the HRA ceases to be covered
by other integrated group health plan cov-
erage without causing the HRA to fail to
comply with the market reforms?

Answer 1: Yes. As explained in Notice
2013-54, Q&A-10, an HRA that covers
fewer than two participants who are cur-
rent employees (such as one covering only
retirees or other former employees) is not
subject to the market reforms. This in-
cludes a retiree-only HRA under which
available amounts are determined in
whole or in part by amounts credited dur-
ing the period that the individual was a
current employee covered by an HRA in-
tegrated with another group health plan.
However, this former-employee-only
HRA constitutes an eligible employer-
sponsored plan under § 5000A(f)(2) for
any month during which funds are re-
tained in the HRA (including amounts re-
tained in the HRA during periods after the
employer has ceased making contribu-
tions). As a result, a participant in an HRA
with available funds for any month will
not be eligible for a premium tax credit
under § 36B for that month. See Notice
2013-54, Q&A-10.

Question 2: Notice 2013-54, Q&A-5
provides that unused amounts that were
credited to an HRA while it was inte-
grated with other group health plan cov-
erage may be used to reimburse medical
expenses in accordance with the terms of
the HRA after an employee ceases to be
covered by the other integrated group

health plan coverage without causing the
HRA to fail to comply with the market
reforms. May an HRA or similar
employer-funded health care arrangement
that covers two or more participants who
are current employees (a current-
employee HRA) be used to purchase in-
dividual market coverage after the em-
ployee covered by the HRA ceases to be
covered by other integrated group health
plan coverage without causing the HRA to
fail to comply with the market reforms?

Answer 2: No. A current-employee
HRA fails to be integrated with another
group health plan if the amounts credited
to the HRA may be used to purchase
individual market coverage. This answer
is intended to clarify the intent of Notice
2013-54, Q&A-5, which in permitting
unused amounts credited to an HRA while
it was integrated with other group health
plan coverage to be used in accordance
with the preexisting terms of the HRA,
assumed that those HRA terms would not
provide a current employee the ability to
purchase duplicative or substitute individ-
ual market coverage. Accordingly, this
failure occurs, for example, even if the
current-employee HRA terms provide that
it may be used to purchase individual cov-
erage while the current employee is cov-
ered by a group health plan with which it
is integrated (which coverage generally
would be duplicative and thus not pur-
chased by the current employee) or, alter-
natively, provide that unused amounts
previously credited to the HRA may be
used to purchase individual market cover-
age in periods during which the partici-
pant is no longer covered by a group
health plan with which the HRA is inte-
grated. Accordingly, a current-employee
HRA that includes terms permitting the
purchase of individual market coverage
will constitute a group health plan that
fails to meet the market reforms because it
is not integrated with another group health
plan.

Question 3: On January 24, 2013, the
Departments issued FAQs that address the
application of the annual dollar limit pro-
hibition to certain HRAs (HRA FAQs).3
The HRA FAQs stated that it was antici-
pated that future guidance would provide

3See Affordable Care Act Implementation FAQs Part XI, available at http://www.dol.gov/ebsa/faqs/faq-aca11.html and at http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/
aca_implementation_faqs11.html.

that, whether or not an HRA was inte-
grated, certain HRA amounts that were
credited prior to January 1, 2014 under
terms that were in effect prior to January
1, 2013 could be used after December 31,
2013 to reimburse medical expenses in
accordance with those terms without caus-
ing the HRA to fail to comply with the
annual dollar limit prohibition. Notice
2013-54 summarized this FAQ but did
not include its substance in the guidance
section of the notice. Does the guidance in
the HRA FAQs remain unchanged, such
that whether or not an HRA is integrated
with other group health plan coverage,
unused amounts credited before January
1, 2014, including any amounts credited
before January 1, 2013 and any amounts
that were credited during 2013 under the
terms of an HRA as in effect on January 1,
2013, may be used after December 31,
2013 to reimburse medical expenses in
accordance with those terms without caus-
ing the HRA to fail to comply with the
annual dollar limit prohibition and the
preventive services requirements?

Answer 3: Yes. Whether or not an
HRA is integrated with other group health
plan coverage, unused amounts credited
before January 1, 2014, including any
amounts credited before January 1, 2013
and any amounts that were credited during
2013 under the terms of an HRA in effect
on January 1, 2013, may be used after
December 31, 2013 to reimburse medical
expenses in accordance with those terms
without causing the HRA to fail to comply
with the annual dollar limit prohibition or
the preventive services requirements. If
the HRA terms in effect on January 1,
2013, did not prescribe a set amount or
amounts to be credited during 2013 or the
timing for crediting such amounts, then
the amounts credited during 2013 may not
exceed the amounts credited for 2012 and
may not be credited on an earlier schedule
or at a faster rate than the crediting sched-
ule or rate that applied during 2012.

Question 4: Notice 2013-54, Q&A-4
explains the circumstances under which
an HRA may be integrated with a group
health plan. May an HRA available to
reimburse the medical expenses of an
employee's spouse and/or dependents (a
family HRA) be integrated with self-

only coverage under the employer's
other group health plan?

Answer 4: No. An HRA is permitted to
be integrated with the employer's other
group health plan coverage for purposes
of the application of the group market
reforms only as to the individuals who are
enrolled in both the HRA and the employ-
er's other group health plan. If the spouse
and/or dependents are not enrolled in the
employer's group health plan coverage,
the coverage of these individuals under
the HRA cannot be integrated with the
coverage under the employer's group
health plan, and the HRA coverage gen-
erally would fail to meet the group market
reforms. Note that an HRA could be struc-
tured to be continuously integrated if eli-
gibility for coverage under the HRA au-
tomatically applied only to individuals
covered under the employer's other group
health plan, so that eligibility for expense
reimbursement would expand automati-
cally if the employee changed coverage
from employee-only coverage to coverage
including a spouse and/or dependents (and
vice versa, for example, if the employee
changed coverage from family coverage
to employee-only coverage).

Treasury and IRS are aware that many
HRAs do not currently contain the restric-
tion necessary to integrate an HRA with
employee-only coverage under the em-
ployer's other group health plan because
the HRA is intended to reimburse only
limited expenses such as co-pays and em-
ployees have been permitted to use them
for these types of expenses of other family
members regardless of whether those fam-
ily members were also enrolled in the
employer's other group health plan. To
facilitate transition to compliance with the
group market reforms through the use of
integrated HRAs, Treasury and IRS will
not treat an HRA available for the ex-
penses of family members not enrolled in
the employer's other group health plan for
plan years beginning before January 1,
2016, as failing to be integrated with an
employer's other group health plan for
plan years beginning before January 1,
2016, nor will they treat an HRA and
group health plan that otherwise would be
integrated based on the terms of the plan
as of December 16, 2015 as failing to be

integrated with an employer's other group
health plan for plan years beginning be-
fore January 1, 2017, solely because the
HRA covers expenses of one or more of
an employee's family members even if
those family members are not also en-
rolled in the employer's other group
health plan. To be integrated with the em-
ployer's group health plan, however, the
HRA must meet all the other requirements
of the applicable guidance on integration
with a group health plan. In addition, the
employer will be responsible under
§ 6055 for reporting the coverage as min-
imum essential coverage for each individ-
ual the medical expenses for whom are
reimbursable by the HRA who is not also
enrolled in the employer's group health
plan. See Notice 2015-68, 2015-41 IRB
547.

### B. Further Guidance on the Application of the Guidance under Notice 2013-54 to Other Arrangements

Question 5: If the terms of an HRA or
employer payment plan provide that the
HRA or employer payment plan may only
be used to reimburse (or pay directly for)
premiums for individual market coverage
consisting solely of excepted benefits4
(such as dental coverage), does the HRA
or employer payment plan fail to satisfy
the market reforms?

Answer 5: No. An HRA or employer
payment plan that, by its terms, reim-
burses (or pays directly for) premiums for
individual market coverage only if that
individual market coverage covers only
excepted benefits does not fail to comply
with the market reforms solely due to the
ability to reimburse the employer for that
individual market coverage. The market
reforms do not apply to a group health
plan that is designed to provide solely
excepted benefits. As a result, an HRA or
employer payment plan and the excepted
benefits individual market coverage for
which the arrangement pays are not sub-
ject to the annual dollar limit prohibition
or the preventive services requirement and
therefore do not fail to satisfy those mar-
ket reforms.

Example 1. Facts: The terms of an HRA
provide that the HRA may only be used to

4See Code § 9832(c), ERISA § 733(c) and PHS Act § 2791(c)

reimburse premiums for individual market
coverage that covers only excepted benefits,
but not individual market coverage that cov-
ers benefits other than excepted benefits.

Conclusion: The HRA is not subject to
the annual dollar limit prohibition or the pre-
ventive services requirement.

Example 2. Facts: The terms of an HRA
provide that the HRA may be used to reim-
burse premiums for individual market cover-
age, with no requirement that the individual
market coverage cover only excepted bene-
fits. A covered employee is reimbursed by
the HRA for premiums for individual market
coverage that covers only excepted benefits.

Conclusion: The HRA is subject to the
annual dollar limit prohibition and the pre-
ventive services requirement, because the
terms of the HRA would have permitted re-
imbursement of premiums for individual
market coverage that is not limited to ex-
cepted benefits.

Question 6: Notice 2013-54 provides
that a group health plan used to purchase
coverage on the individual market is not
integrated with that individual market
coverage. If the group health plan is an
employer payment plan offered through a
cafeteria plan under § 125 (referred to
throughout this notice as a cafeteria plan)
that uses salary reduction or other contri-
butions to purchase coverage on the indi-
vidual market, is the employer payment
plan integrated with the individual market
coverage?

Answer 6: No. An employer arrange-
ment reimbursing the cost of individual
market coverage offered under a cafeteria
plan is an employer payment plan
(whether or not funded solely by salary
reduction or also including other em-
ployer contributions, such as flex credits),
which (as set forth in Notice 2013-54) is
a group health plan for purposes of the
market reforms. This separate group
health plan (in this case, the employer
payment plan offered under the cafeteria
plan) cannot be integrated with the indi-
vidual market coverage purchased
through that employer payment plan.

As a separate arrangement that is a
group health plan under the Code, that
employer payment plan offered through
the cafeteria plan generally must satisfy
the requirements for group health plans
(unless the individual market coverage the
premiums for which the plan pays or re-
imburses covers only excepted benefits,
see Q&A-5 above). However, because the
employer payment plan offered through

the cafeteria plan cannot be integrated
with any individual market coverage pur-
chased under the arrangement, it will fail
to comply with (1) the annual dollar limit
prohibition, because it is considered to
impose an annual limit up to the cost of
the individual market coverage pur-
chased through the arrangement, and (2)
the preventive services requirements,
because it does not provide preventive
services without cost-sharing in all in-
stances. Consequently, an employer
payment plan that reimburses the cost of
individual coverage offered through a
cafeteria plan will fail to satisfy the mar-
ket reforms.

## III. ADDITIONAL MISCELLANEOUS GUIDANCE ON AFFORDABILTY OF EMPLOYER- SPONSORED HEALTH COVERAGE

Question 7: How are contributions to
an HRA taken into account for purposes
of determining whether an applicable
large employer has made an offer of af-
fordable minimum value coverage under
an eligible employer-sponsored plan un-
der §§ 36B and 5000A and any related
consequences under § 4980H(b) (includ-
ing application of the affordability safe
harbors in § 54.4980H-5(e)(2))?

Answer 7: An applicable large em-
ployer (as defined in § 54.4980H-1(a)(4))
may be subject to an assessable payment
under § 4980H(b) for any month for
which a full-time employee (as defined in
§ 54.4980H-1(a)(21)) has received a pre-
mium tax credit under § 36B in connec-
tion with enrollment in a qualified health
plan through the Marketplace. Under
§ 36B(c)(2)(C), an employee is not eligi-
ble for the premium tax credit for any
month for which the employee is eligible
for coverage under an eligible employer-
sponsored plan that provides minimum
value and is affordable (or for any month
for which the employee enrolls in an eli-
gible employer-sponsored plan, regardless
of whether the plan is affordable or pro-
vides minimum value). For this purpose,
an offer of coverage is affordable if the
employee's required contribution (within
the meaning of § 5000A(e)(1)(B)) for cov-
erage under the plan is 9.5 percent (as ad-
justed annually) or less of the employee's
household income. See § 36B(c)(2)(C)(II).

The amount of an employee's required
contribution for purposes of determining
affordability under § 36B is determined
under § 5000A and the related regulations.
Section 5000A(e)(1)(B)(i) provides that
the term "required contribution" means, in
the case of an individual eligible to pur-
chase minimum essential coverage con-
sisting of coverage through an eligible
employer-sponsored plan, the portion of
the annual premium that would be paid by
the individual (without regard to whether
paid through salary reduction or other-
wise) for self-only coverage. As a result,
the determination of whether an applica-
ble large employer has made an offer of
affordable, minimum value coverage un-
der an eligible employer-sponsored plan
for purposes of any related consequences
under § 4980H(b) generally is based on
the standards set forth in §§ 5000A and
36B.

The treatment of employer contribu-
tions to HRAs for purposes of determin-
ing the employee's required contribution
is determined under the rules provided in
§§ 1.5000A-3(e)(3)(ii)(D) and 1.36B-
2(c)(v)(A)(5). Under those rules, amounts
made available for the current plan year
under an HRA that an employee may use
to pay premiums for an eligible employer-
sponsored plan, or that an employee may
use to pay premiums for an eligible
employer-sponsored plan and also may
use for cost-sharing and/or for other
health benefits not covered by that plan in
addition to premiums, are counted toward
the employee's required contribution (and
thus reduce the dollar amount of that re-
quired contribution) if the HRA would be
integrated, as that term is used in Notice
2013-54 or in any successor published
guidance, with the eligible employer-
sponsored plan for an employee enrolled
in the plan.

Employer contributions to an HRA
count toward an employee's required con-
tribution only to the extent the amount of
the employer's annual contribution to the
HRA is required under the terms of the
arrangement or otherwise determinable
within a reasonable time before the em-
ployee must decide whether to enroll in
the eligible employer-sponsored plan.
Sections 1.5000A-3(e)(3)(ii)(D) and
1.36B-2(c)(v)(A)(5). A contribution that
meets this requirement relates to the im-

mediately subsequent period of coverage
for which the employee could enroll and
use the HRA contribution. For purposes of
§ 4980H(b) and the related reporting un-
der § 6056 (Form 1095-C, Employer-
Provided Health Insurance Offer and Cov-
erage), the employer contribution to an
HRA (and any resulting reduction in the
employee contribution) is treated as made
ratably for each month of the period to
which it relates.

Example. Facts: The employee contribu-
tion for health coverage under the major
medical group health plan offered by the
employer is generally $200 per month. For
the current plan year, the employer makes
newly available $1,200 under an HRA that
the employee may use to pay the employee
share of contributions for the major medical
coverage, pay cost-sharing, or pay towards
the cost of vision or dental coverage. The
HRA satisfies all requirements for integration
with the major medical group health plan as
provided in Notice 2013-54.

Conclusion: The $1,200 employer contri-
bution to the HRA reduces the employee's
required contribution for the coverage under
§§ 36B and 5000A. For purposes of
§ 4980H(b) and the related reporting under
§ 6056, the employee's required contribution
for the major medical plan is $100 ($200 -
$100) per month because 1/12 of the $1,200
HRA amount per month is taken into account
as an employer contribution whether or not
the employee uses the HRA to pay the em-
ployee share of contributions for the major
medical coverage.

Section 54.4980H-5(e)(2) provides
three affordability safe harbors for pur-
poses of § 4980H(b), but those safe har-
bors relate to the calculation of the em-
ployee's household income and not the
calculation of the employee's required
contribution. For purposes of applying
those safe harbors to determine whether
an offer of coverage is affordable, the
treatment of employer contributions to an
HRA is consistent with the treatment of
those contributions for purposes of deter-
mining whether coverage is affordable un-
der §§ 5000A and 36B(c)(2)(C)(II) as de-
scribed above.

Question 8: How are employer flex
contributions to a cafeteria plan taken into
account for purposes of determining
whether an applicable large employer has
made an offer of affordable minimum
value coverage under an eligible
employer-sponsored plan under §§ 36B

and 5000A and any related consequences
under § 4980H(b) (including application
of the affordability safe harbors in
§ 54.4980H-5(e)(2))?

Answer 8: As discussed in Q&A-7, the
affordability of an employer's offer of eli-
gible employer-sponsored coverage for pur-
poses of §§ 36B and 5000A, and any related
consequences under § 4980H(b) (including
under the § 54.4980H-5(e)(2) affordability
safe harbors), depends on whether the em-
ployee's required contribution exceeds the
applicable required contribution percentage
of household income (under §§ 36B and
5000A) or wages (under the § 4980H af-
fordability safe harbors). As provided in
§§ 1.5000A-3(e)(3)(ii)(A) and 1.36B-
2(c)(3)(v)(A)(1), an employee's required
contribution is the portion of the annual
premium that the employee must pay for
self-only coverage (whether by salary re-
duction or otherwise).

Under a § 125 cafeteria plan, the em-
ployee's enrollment in a group health plan
generally is funded by salary reduction
but may also be funded by employer flex
contributions. Whether these employer
flex contributions reduce the amount of an
employee's required contribution depends
on the nature of the available flex contri-
bution. Specifically, the amount of the
employer contribution reduces the em-
ployee's required contribution if the
amount constitutes a "health flex contri-
bution" under §§ 1.5000A-3(e)(3)(ii)(E)
and 1.36B-2(c)(3)(v)(A)(6). Sections
1.5000A-3(e)(3)(ii)(E) and 1.36B-
2(c)(v)(A)(6) provide that an amount is a
health flex contribution if (1) the em-
ployee may not opt to receive the amount
as a taxable benefit, (2) the employee may
use the amount to pay for minimum es-
sential coverage, and (3) the employee
may use the amount exclusively to pay for
medical care, within the meaning of
§ 213. For purposes of § 4980H(b) and the
related reporting under § 6056 (Form
1095-C), a health flex contribution is
treated as made ratably for each month of
the period to which it relates.

An employer flex contribution that is
not a health flex contribution does not
reduce an employee's required contribu-
tion. Consistent with §§ 1.5000A-
3(e)(3)(ii)(E) and 1.36B-2(c)(v)(A)(6),

this means, for example, that if an em-
ployer flex contribution that is available to
pay for health care is also available to pay
for any non-health care benefits under the
§ 125 cafeteria plan (such as dependent
care or group term life insurance), that
contribution is not a health flex contribu-
tion and, as a result, does not reduce the
required employee contribution. Simi-
larly, an employer flex contribution that is
available to pay for health care but also
could be received as cash is not a health
flex contribution and does not reduce the
employee's required contribution. (See
Q&A-9, however, concerning treatment
of amounts that are not available to pay
for coverage under an eligible employer-
sponsored health plan and are available
only if the employee declines that
coverage.)

The treatment of non-health flex con-
tributions differs from the treatment of
health flex contributions and contributions
to HRAs discussed in Q&A-7 of this no-
tice because, as explained in the preamble
to the final regulations under § 5000A, the
appropriate measure of an employee's re-
quired contribution is the amount of com-
pensation that the employee could apply
to something other than health-related ex-
penses that the employee must forgo to
obtain coverage under the employer's
health plan.5 Thus, if an employer pro-
vides employees with an HRA contribu-
tion or a health flex contribution that may
be used only to pay health expenses, the
employee's cost of coverage (the amount
of salary or other non-health benefits that
the employee must forgo to obtain cover-
age under the employer's health plan) is
reduced by the amount of the health flex
contribution or HRA contribution. In that
case, it is fair to assume that the employee
would use the health flex contribution or
HRA contribution to pay for the employ-
er's health coverage (because the health
flex contribution or HRA contribution can
be used only for health benefits), and if the
employee does not use it for that purpose
the employee does not gain any other eco-
nomic benefit. Therefore, the employee's
required contribution is equal to the
amount that the employer otherwise re-
quires the employee to pay for health cov-

579 FR 70464, 70465 (Nov. 26, 2014).

erage, reduced by the amount of the health
flex contribution or HRA contribution.

If, however, the employer provides an
employee with a flex contribution that
may be used to pay health expenses but
also may be used for non-health benefits
(that is, a non-health flex contribution), an
employee who elects coverage under the
employer's health plan must forgo the
non-health benefits in order to take the
health coverage. Because a non-health
flex contribution (unlike a health flex con-
tribution or HRA contribution) may be
used for benefits other than health bene-
fits, it is not appropriate to assume that the
employee would use the non-health flex
contribution to pay for health coverage;
the employee might choose to use that flex
contribution for another non-health bene-
fit. Accordingly, the employee's required
contribution in this case is equal to the
stated amount the employee must pay for
health coverage (whether that amount is
paid by the employee in the form of a flex
contribution, a salary reduction, or other-
wise) and is not reduced by the non-health
flex contribution.

Example 1 (Health Flex Contribution
Reduces Dollar Amount of Employee's Re-
quired Contribution). Facts: Employer of-
fers employees coverage under a group
health plan through a § 125 cafeteria plan. An
employee electing self-only coverage under
the health plan is required to contribute $200
per month toward the cost of coverage. Em-
ployer offers employer flex contributions of
$600 for the plan year that may only be
applied toward the employee share of contri-
butions for the group health coverage or con-
tributed to a health flexible spending arrange-
ment (health FSA).

Conclusion: The $600 employer flex con-
tribution is a health flex contribution and
reduces the employee's required contribution
for the coverage under §§ 36B and 5000A
and for purposes of any related consequences
under § 4980H(b) (including application of
the § 54.4980H-5(e)(2) affordability safe
harbors). Because the $600 employer flex
contribution is a health flex contribution, the
$600 is taken into account as an employer
contribution (and therefore reduces the em-
ployee's required contribution) regardless of
whether the employee elects to apply the
health flex contribution toward the employee
contribution for the group health coverage or
elects to contribute it to the health FSA. For
purposes of § 4980H(b) and the related re-
porting under § 6056 (Form 1095-C), the
employee's required contribution for the
group health coverage is $150 ($200 - $50)
per month.

Example 2 (Employer Flex Contribution
Does Not Reduce Dollar Amount of Em-
ployee's Required Contribution). Facts:
Employer offers employees coverage under a
group health plan through a § 125 cafeteria
plan. An employee electing self-only cover-
age under the health plan contributes $200
per month toward the cost of coverage. Em-
ployer offers employer flex contributions of
$600 for the plan year that can be used for
any benefit under the § 125 cafeteria plan
(including benefits not related to health) but
are not available as cash.

Conclusion: Because the $600 employer
flex contribution is not usable exclusively for
medical care, it is not a health flex contribu-
tion and therefore does not reduce the em-
ployee's required contribution for the cover-
age under §§ 36B and 5000A and any related
potential consequences under § 4980H(b).
For purposes of § 4980H(b) and the related
reporting under § 6056 (Form 1095-C), the
employee's required contribution is $200 per
month.

Example 3 (Employer Flex Contribution
Does Not Reduce Dollar Amount of Em-
ployee's Required Contribution). Facts:
Same as in Example 2, except that the em-
ployee may also elect to receive the $600
employer flex contribution as cash or other
taxable compensation.

Conclusion: Same as conclusion for Ex-
ample 2 because the employer flex contribu-
tion is not a health flex contribution. The
same conclusion would apply if the employer
flex contribution were available to pay for
health benefits or to be taken as cash or other
taxable compensation but not available to
pay for other types of benefits.

Solely for purposes of § 4980H(b) and
solely for coverage for plan years begin-
ning before January 1, 2017, an employer
flex contribution that is not a health flex
contribution because it may be used for
non-health benefits (including non-taxable
benefits and/or cash or another taxable
benefit), but that may be used by the em-
ployee towards the amount the employee
is otherwise required to pay for the health
coverage, will be treated as reducing the
amount of an employee's required contri-
bution. This relief is not available with
respect to a flex contribution arrangement
offering non-health benefits that is ad-
opted after December 16, 2015 or that
substantially increases the amount of the
flex contribution after December 16, 2015
(a "non-relief-eligible flex contribution ar-
rangement"). For this purpose, a flex con-
tribution arrangement will be treated as
adopted after December 16, 2015 unless
(1) the employer offered the flex contri-
bution arrangement (or a substantially

similar flex contribution arrangement) for
a plan year including December 16, 2015;
(2) a board, committee, or similar body or
an authorized officer of the employer spe-
cifically adopted the flex contribution ar-
rangement before December 16, 2015; or
(3) the employer had provided written
communications to employees on or be-
fore December 16, 2015 indicating that
the flex contribution arrangement would
be offered to employees at some time in
the future.

In addition, solely for coverage for
plan years beginning before January 1,
2017, an employer may reduce the amount
of the employee's required contribution
by the amount of a non-health flex contri-
bution (other than a flex contribution
made under a non-relief-eligible flex con-
tribution arrangement) for purposes of in-
formation reporting under § 6056 (line 15
of Form 1095-C). Because treating a non-
health flex contribution as reducing an
employee's required contribution may af-
fect the employee's eligibility for the pre-
mium tax credit under § 36B, employers
are encouraged not to reduce the amount
of the employee's required contribution
by the amount of a non-health flex contri-
bution for purposes of information report-
ing under § 6056. If an employee's re-
quired contribution is reported in this
manner (that is, without reduction for the
amount of a non-health flex contribution)
and the employer is contacted by the IRS
concerning a potential assessable payment
under § 4980H(b) relating to the employ-
ee's receipt of a premium tax credit, the
employer will have an opportunity to re-
spond and show that it is entitled to the
relief described in this Q&A-8 to the
extent that the employee would not have
been eligible for the premium tax credit if
the required employee contribution had
been reduced by the amount of the non-
health flex contribution or to the extent
that the employer would have qualified for
an affordability safe harbor under
§ 54.4980H-(4)(e)(2) if the required em-
ployee contribution had been reduced by
the amount of the non-health flex contri-
bution. See also Q&A-26 for certain relief
with respect to employer information re-
porting under § 6056.

For individual taxpayers, the rules in
§§ 1.5000A-3(e)(3)(ii)(E) and 1.36B-
2(c)(3)(v)(A)(6) apply for months begin-

ning after December 31, 2013, as pro-
vided in those regulations. Accordingly, an
employer non-health flex contribution, as
illustrated in Example 2 and Example 3
of this Q&A-8, does not reduce the
amount of an employee's required contri-
bution for purposes of § 5000A and for
determining eligibility for the premium
tax credit under § 36B.

Nothing in this notice, including this
Q&A-8, modifies the guidance in Notice
2012-40 treating flex contributions under
a health flexible spending account (health
FSA) that an employee may elect to re-
ceive as cash or a taxable benefit as a
salary reduction contribution for purposes
of the limit on salary reduction contribu-
tions to health FSAs under § 125(i). See
also the definition of "employer flex cred-
its" in Prop. Treas. Reg. § 1.125-5(b).

Question 9: How are employer pay-
ments that are available only if an em-
ployee declines coverage under an eligible
employer-sponsored plan taken into ac-
count for purposes of determining
whether an applicable large employer has
made an offer of affordable minimum
value coverage under an eligible
employer-sponsored plan under §§ 36B
and 5000A and any related consequences
under § 4980H(b) (including application
of the affordability safe harbors in
§ 54.4980H-5(e)(2))?

Answer 9: As discussed in Q&As-7
and 8, the affordability of an employer's
offer of eligible employer-sponsored cov-
erage for purposes of any related conse-
quences under § 4980H(b) (including un-
der the § 54.4980H-5(e)(2) affordability
safe harbors) depends on whether the em-
ployee's required contribution exceeds the
applicable required contribution percentage
of household income (under § 36B) or
wages (under the § 4980H affordability safe
harbors). As provided in §§ 1.5000A-
3(e)(3)(ii)(A) and 1.36B-2(c)(3)(v)(A)(1),
an employee's required contribution is the
portion of the annual premium that the em-
ployee must pay for self-only coverage
(whether by salary reduction or otherwise).

If an employer offers to an employee
an amount that cannot be used to pay for
coverage under the employer's health plan
and is available only if the employee de-
clines coverage (which includes waiving
coverage in which the employee would
otherwise be enrolled) under the employ-

er's health plan (an opt-out payment), this
choice between cash and coverage pre-
sented by the offer of an opt-out payment
is analogous to the cash-or-coverage
choice presented by the option to pay for
coverage via salary reduction. In both
cases, the employee may purchase the
health plan coverage only at the price of
forgoing a specified amount of cash com-
pensation that the employee would other-
wise receive - salary, in the case of a
salary reduction, or other compensation,
in the case of the opt-out payment. For
example, an employee who must reduce
his or her compensation by $1,000 to pay
for employer-provided health coverage
has a choice that is similar to the choice of
an employee who is ostensibly not re-
quired to pay anything for employer-
provided coverage, but who would receive
an additional $1,000 in compensation
only if he or she declined coverage. In
each case, the price of obtaining
employer-provided health coverage is for-
going $1,000 in compensation that other-
wise would be available to the employee.

An opt-out payment may have the ef-
fect of increasing an employee's contribu-
tion for health coverage beyond the
amount of any salary reduction contribu-
tion. For example, if an employer offers
employees group health coverage through
a § 125 cafeteria plan, requiring employ-
ees who elect self-only coverage to con-
tribute $200 per month toward the cost of
that coverage, and offers an additional
$100 per month in taxable wages to each
employee who declines the coverage, the
offer of $100 in additional compensation
has the economic effect of increasing the
employee's contribution for the coverage.
In this case, the employee contribution for
the group health plan effectively would be
$300 ($200 + $100) per month, because
an employee electing coverage under the
health plan must forgo $100 per month in
compensation in addition to the $200 per
month in salary reduction.

Consistent with this analysis, Treasury
and IRS have determined that it is gener-
ally appropriate to treat an unconditional
opt-out arrangement (that is, an arrange-
ment providing for a payment conditioned
solely on an employee declining coverage
under an employer's health plan and not
on an employee satisfying any other
meaningful requirement related to the pro-

vision of health care to employees, such as
a requirement to provide proof of cover-
age provided by a spouse's employer) in
the same manner as a salary reduction for
purposes of determining an employee's
required contribution under §§ 36B and
5000A and any related consequences un-
der § 4980H(b). Accordingly, Treasury
and IRS intend to propose regulations re-
flecting this rule and requesting comments
on the treatment of employer offers of
opt-out payments under one or more of
these sections. It is anticipated that the
proposed regulations will also address and
request comments on the treatment of opt-
out payments that are conditioned not
only on the employee declining employer-
sponsored coverage but also on satisfac-
tion of additional conditions (such as the
employee providing proof of having cov-
erage provided by a spouse's employer or
other coverage).

Treasury and IRS anticipate that the
regulations generally will apply only for
periods after the issuance of final regula-
tions. However, Treasury and IRS also
anticipate that mandatory inclusion in the
employee's required contribution of
amounts offered or provided under an un-
conditional opt-out arrangement (as de-
fined in the preceding paragraph) that is
adopted after December 16, 2015 (a “non-
relief-eligible opt-out arrangement") will
apply for periods after December 16,
2015. For this purpose, an opt-out ar-
rangement will be treated as adopted after
December 16, 2015 unless (1) the em-
ployer offered the opt-out arrangement (or
a substantially similar opt-out arrange-
ment) with respect to health coverage pro-
vided for a plan year including December
16, 2015; (2) a board, committee, or sim-
ilar body or an authorized officer of the
employer specifically adopted the opt-out
arrangement before December 16, 2015;
or (3) the employer had provided written
communications to employees on or be-
fore December 16, 2015 indicating that
the opt-out arrangement would be offered
to employees at some time in the future.

For the period prior to the applicability
date of regulations, employers are not re-
quired to increase the amount of an em-
ployee's required contribution by the
amount of an opt-out payment (other than
a payment made under a non-relief-
eligible opt-out arrangement) for purposes

of § 6056 (Form 1095-C), and an opt-out
payment (other than a payment made un-
der a non-relief-eligible opt-out arrange-
ment) will not be treated as increasing an
employee's required contribution for pur-
poses of any potential consequences under
§ 4980H(b). However, until the applica-
bility date of any further guidance (and in
any event for plan years beginning before
January 1, 2017), individual taxpayers
may rely on the treatment of uncondi-
tional opt-out payments described in this
Q&A-9 for purposes of §§ 36B and
5000A and treat these payments as in-
creasing the employee's required contri-
bution. In addition, for this same period
with respect to any individual who could
demonstrate that the individual meets a
condition (in addition to declining the em-
ployer's health coverage) that must be sat-
isfied to receive an opt-out payment (such
as demonstrating that the employee has
coverage under a spouse's group health
plan), the individual may treat the opt-out
payment as increasing the employee's re-
quired contribution for purposes of
§§ 36B and 5000A.

Question 10: How are employer pay-
ments for fringe benefits made pursuant to
the McNamara-O'Hara Service Contract
Act ("SCA"),6 the Davis-Bacon Act,7 or
the Davis-Bacon Related Acts (collec-
tively with the Davis-Bacon Act, the
"DBRA")8 taken into account for pur-
poses of determining whether an applica-
ble large employer has made an offer of
affordable minimum value coverage un-
der an eligible employer-sponsored plan
under §§ 36B and 5000A and any related
consequences under § 4980H(b) (includ-
ing application of the affordability safe
harbors in § 54.4980H-5(e)(2))?

Answer 10: The SCA and DBRA re-
quire that workers employed on certain
federal contracts be paid prevailing wages
and fringe benefits. Under the SCA and
DBRA, an employer generally can satisfy
its fringe benefit obligations by providing
a particular benefit or benefits, as deter-
mined by the employer, that have a suffi-
cient dollar value. Alternatively, an em-
ployer generally may satisfy its fringe
benefit obligations by providing the cash

equivalent of benefits or some combina-
tion of cash and benefits, or it may permit
employees to choose among various ben-
efits or among various benefits and cash.
If an employer chooses to provide fringe
benefits under the SCA or DBRA by of-
fering an employee the option to enroll in
health coverage provided by the employer
(including an option to decline that cov-
erage), and the employee declines the cov-
erage, that employer would then generally
be required by the SCA or DBRA to pro-
vide the employee with cash or other ben-
efits of an equivalent value.

Q&A-8 of this notice addresses em-
ployer flex contributions that are available
to pay for health care and non-health care
benefits (including cash or other taxable
compensation) under a § 125 cafeteria
plan and that, because they are non-health
flex contributions, would not reduce the
required employee contribution for pur-
poses of §§ 36B and 5000A or for pur-
poses of any related consequences under
§ 4980H(b). However, Treasury and IRS
have been made aware that, as applied to
employers with employees who are sub-
ject to the SCA or DBRA, the interaction
of this treatment with SCA or DBRA
fringe benefit requirements could create
certain difficulties. In the case of an em-
ployer that chooses to provide fringe ben-
efits under the SCA or DBRA by offering
employees the option to enroll in health
coverage provided by the employer (in-
cluding an option to decline that cover-
age), the amount that must be provided to
employees who decline to enroll in the
group health plan as a cash payment or
other benefits in lieu of coverage under
the group health plan is substantial, would
not count as an employer contribution to-
ward the cost of coverage, and therefore
would not reduce the employee's required
contribution for purposes of §§ 36B and
5000A or for purposes of any related con-
sequences under § 4980H(b). Accord-
ingly, an employer that chooses to satisfy
its obligation to provide fringe benefits
under the SCA or DBRA by offering an
employee the option to enroll in health
coverage provided by the employer (in-
cluding an option to decline that cover-

age) generally would need to provide a
significant additional subsidy to make the
offer affordable for purposes of § 36B and
avoid any related consequences under
§ 4980H(b). While the SCA and DBRA
require employers to pay covered employ-
ees no less than prevailing wage and
fringe benefit rates, this additional subsidy
would result in certain employees receiv-
ing amounts significantly in excess of
SCA and DBRA minimum rates.

Treasury and IRS continue to consider
how the requirements of the SCA, the
DBRA, and the employer shared respon-
sibility provisions under § 4980H may be
coordinated. However, until the applica-
bility date of any further guidance, and in
any event for plan years beginning before
January 1, 2017, employer fringe benefit
payments (including flex credits or flex
contributions) under the SCA or DBRA
that are available to employees covered by
the SCA or DBRA to pay for coverage
under an eligible employer-sponsored
plan (even if alternatively available to the
employee in other benefits or cash) will be
treated as reducing the employee's re-
quired contribution for participation in
that eligible employer-sponsored plan for
purposes of § 4980H(b), but only to the
extent the amount of the payment does not
exceed the amount required to satisfy the
requirement to provide fringe benefit pay-
ments under the SCA or DBRA. In addi-
tion, for these same periods an employer
may treat these employer fringe benefit
payments as reducing the employee's re-
quired contribution for purposes of report-
ing under § 6056 (Form 1095-C), subject
to the same limitations that apply for pur-
poses of § 4980H(b). Employers are, how-
ever, encouraged to treat these fringe ben-
efit payments as not reducing the
employee's required contribution for pur-
poses of reporting under § 6056. If an
employee's required contribution is re-
ported without reduction for the amount
of the fringe benefit payment and the em-
ployer is contacted by the IRS concerning
a potential assessable payment under
§ 4980H(b) relating to the employee's re-
ceipt of a premium tax credit, the em-
ployer will have an opportunity to respond

8See 29 CFR 5.1(a) (listing many of the Related Acts).

and show that it is entitled to the relief
described in this Q&A-10 to the extent
that the employee would not have been
eligible for the premium tax credit if the
required employee contribution had been
reduced by the amount of the fringe ben-
efit payment or to the extent that the em-
ployer would have qualified for an afford-
ability safe harbor under § 54.4980H-
(4)(e)(2) if the required employee
contribution had been reduced by the
amount of the fringe benefit payment. See
also Q&A-26 for certain relief with re-
spect to employer information reporting
under § 6056.

For purposes of §§ 36B and 5000A,
individual taxpayers are not required to
take these amounts into account as reduc-
ing the employee's required contribution.

Treasury and IRS continue to consider
other methods for reporting the amount of
the required contribution for employees
subject to the SCA or DBRA, including
the possible use of indicator codes; how-
ever, no such other reporting methods, if
ultimately adopted, will be required to be
implemented for reporting on plan years
beginning before January 1, 2017.

Example. Facts: Employer offers em-
ployees subject to the SCA or DBRA cover-
age under a group health plan through a
§ 125 cafeteria plan, which the employees
may choose to accept or reject. Under the
terms of the offer, an employee may elect to
receive self-only coverage under the plan at
no cost, or may alternatively decline cover-
age under the health plan and receive a tax-
able payment of $700 per month. For the
employee, $700 per month does not exceed
the amount required to satisfy the fringe ben-
efit requirements under the SCA or DBRA.

Conclusion: Until the applicability date
of any further guidance (and in any event for
plan years beginning before January 1,
2017), for purposes of §§ 4980H(b) and
6056, the required employee contribution for
the group health plan for an employee who is
subject to the SCA or DBRA is $0. However,
for purposes of §§ 36B and 5000A, that em-
ployee's required contribution for the group
health plan is $700 per month.

Question 11: Q&As 7 through 10 of
this notice address the determination of an
employee's required contribution under
§§ 36B and 5000A in cases in which an
employer offers certain HRA contribu-
tions, flex credits, or opt-out payments.
Some of these Q&As also provide transi-
tion relief for employers that treat these
amounts differently for purposes of re-

porting the employee's required contribu-
tion under § 6056. Could this different
treatment have any implications for em-
ployees?

Answer 11: The vast majority of indi-
viduals offered employer-provided cover-
age will not be affected by the guidance
provided in Q&As 7 through 10 of this
notice. Specifically, the guidance, includ-
ing the relief for employers, will not affect
the following individuals' eligibility for
the premium tax credit: (1) employees
who enrolled in the employer-sponsored
coverage; (2) employees who enrolled in
other health coverage that was not cover-
age offered through the Marketplace; (3)
employees who were offered health cov-
erage that does not include an arrange-
ment described in Q&As 7 through 10; (4)
employees who for any other reason
would not qualify for a premium tax credit
(for example, an employee who qualifies
for Medicare or has household income in
excess of the limits); (5) generally, em-
ployees who enrolled in coverage through
the Marketplace and received the benefit
of advance payments of the premium tax
credit based on a determination by the
Marketplace that their offer of employer-
sponsored coverage was not affordable
(see § 1.36B-2(c)(3)(v)(A)(3)); and (6)
employees who did not enroll in any
coverage.

Certain employees, however, may be
affected by the transition relief for em-
ployers in Q&As 8 through 10. (Q&A-7
does not involve any relief for employers.)
Because employers are permitted to report
a lower amount as the employee's re-
quired contribution by not taking into ac-
count the modifications described in
Q&As 8 through 10 (including reporting
an offer as a qualifying offer on Form
1095-C that, taking into account the mod-
ifications, would not be a qualifying of-
fer), employees who enrolled in coverage
through the Marketplace, who did not re-
ceive the benefit of advance payments of
the premium tax credit, but whose house-
hold income is in the range for premium
tax credit eligibility, may need additional
information from their employers regard-
ing their required employee contribution
to determine whether they may claim the
premium tax credit.

Employers using the § 6056 relief in
Q&As 8 through 10 are encouraged to

notify employees that they may obtain
accurate information about their required
contribution taking into account the mod-
ifications provided in Q&A-8 through 10
using the employer contact telephone
number provided to the employee on
Form 1095-C. Without regard to how the
employee obtains that information, as de-
termined under Q&A-8 through 10, if the
modified required contribution is not af-
fordable for purposes of § 36B and the
employee is otherwise entitled to the pre-
mium tax credit, the employee may claim
it on Form 8692, Premium Tax Credit,
which is filed with the employee's annual
income tax return (regardless of the re-
quired contribution or qualifying offer in-
formation reported on that employee's
Form 1095-C).

Question 12: How are the adjustments
to the affordability threshold under
§ 36B(c)(2)(C)(i)(II) that are made in ac-
cordance with § 36B(c)(2)(C)(iv) taken
into account for purposes of the following
provisions of the regulations under
§§ 4980H and 6056: (1) the affordability
safe harbors under § 54.4980H-5(e), (2)
the reference to an offer of coverage under
§ 54.4980H-4, (3) the multiemployer
plan interim relief described in section
XV.E of the preamble to the final regula-
tions under § 4980H, and (4) the definition
of a qualifying offer for purposes of
§ 301.6056-1(j)(1) (reporting by applica-
ble large employers)?

Answer 12: In each case, the reference
to 9.5 percent is adjusted to reflect the
adjustment to the affordability provisions
under § 36B(c)(2)(C)(iv). Section
36B(b)(1) generally provides that an indi-
vidual may be eligible for a premium as-
sistance credit amount with respect to any
coverage month. Section 36B(c)(2)(B)
provides that a coverage month does not
include any month with respect to an in-
dividual if for such month the individual
is eligible for minimum essential coverage
other than eligibility for coverage de-
scribed in § 5000A(f)(1)(C) (relating to
coverage in the individual market). Sec-
tion 36B(c)(2)(C)(i) provides that an em-
ployee is not treated as eligible for mini-
mum essential coverage if such coverage
(1) consists of an eligible employer-
sponsored plan (as defined in
§ 5000A(f)(2)), and (2) the employee's
required contribution (within the meaning

of § 5000A(e)(1)(B)) with respect to the
plan exceeds 9.5 percent (as adjusted annu-
ally) of the applicable taxpayer's household
income. Section 36B(c)(2)(C)(iv) provides
that in the case of plan years beginning after
2014, the Secretary shall adjust the 9.5 per-
cent under § 36B(c)(2)(C)(i)(II) in the same
manner as the percentages are adjusted un-
der § 36B(b)(3)(A)(ii). See Rev. Proc.
2014-37, 2014-33 IRB 363 (adjustment to
9.56 percent for plan years beginning in
2015); Rev. Proc. 2014-62, 2014-50 IRB
948 (adjustment to 9.66 percent for plan
years beginning in 2016).

The affordability safe harbors in the
regulations under § 4980H are based on
9.5 percent of an employee's wages re-
ported on the Form W-2, Wage and Tax
Statement (§ 54.4980H-5(e)(2)(ii), Form
W-2 safe harbor), 9.5 percent of an
amount equal to 130 hours multiplied by
the lower of the employee's hourly rate of
pay as of the first day of the coverage
period or lowest rate of pay during the
calendar month (§ 54.4980H-5(e)(2)(iii),
rate of pay safe harbor), or 9.5 percent of
a monthly amount determined as the fed-
eral poverty line for a single individual for
the applicable calendar year, divided by
12 (§ 54.4980H-5(e)(2)(iv), federal pov-
erty line safe harbor). The 9.5 percent
standard set forth in each of the afford-
ability safe harbors is derived from
§ 36B(c)(2)(C)(i), basing affordability on
a required contribution not exceeding 9.5
percent of the applicable taxpayer's
household income. The § 4980H(b) af-
fordability safe harbors are intended to
provide safe harbors with respect to the
determination of the employee's house-
hold income as part of the affordability
calculation because an employer generally
will not have access to that information
with respect to its employees. The safe
harbors are not intended to otherwise alter
the affordability calculation, and accord-
ingly Treasury and IRS intend to amend
the regulations under § 4980H to reflect
that the applicable percentage in the af-
fordability safe harbors should be adjusted
consistent with § 36B(b)(3)(A)(ii), so that
employers may rely upon the 9.56 percent
for plan years beginning in 2015 and 9.66
percent for plan years beginning in 2016.

Similarly, when determining if there is
an offer of coverage for purposes of
§ 54.4980H-4 (requirement that employ-
ees be permitted to decline enrollment in
coverage absent certain conditions in or-
der for the arrangement to be treated as an
offer of coverage), or whether coverage un-
der a multiemployer plan is affordable under
the Interim Guidance with respect to Mul-
tiemployer Arrangements in the preamble to
the final regulations under § 4980H (79 FR
8576), an applicable large employer may
use the 9.5 percent standard as indexed pur-
suant to § 36B(c)(2)(C)(iv).

Treasury and IRS also intend to amend
the regulations under § 6056 that provide
alternative reporting methods for certain
types of offers of coverage, referred to as
qualifying offers of coverage. Specifi-
cally, a qualifying offer under
§ 301.6056-1(j)(1)(i) is an offer at em-
ployee cost for employee-only coverage
not exceeding 9.5 percent of the mainland
single federal poverty line. Treasury and
IRS intend to amend § 301.6056-
1(j)(1)(i) to reflect that the reference to 9.5
percent is adjusted to reflect any adjust-
ments under § 36B(c)(2)(C)(iv), and for
those changes to be applicable back to
December 16, 2015. For all periods, ap-
plicable large employers may rely on the
9.5 percent standard as adjusted pursuant
to § 36B(c)(2)(C)(iv) in applying the al-
ternative reporting method for qualifying
offers.

Question 13: Under § 4980H(c)(5), in
the case of any calendar year after 2014,
the applicable dollar amounts of $2,000
and $3,000 under § 4980H(c)(1) and
(b)(1) are increased based on the premium
adjustment percentage as defined in
§ 1302(c)(4) of the Affordable Care Act
(4.213431463 for 20159 and 8.316047520
for 201610) rounded to the lowest multiple
of $10. What are those amounts for calendar
years 2015 and 2016?

Answer 13: For calendar year 2015,
the adjusted $2,000 amount in
§ 4980H(c)(1) is $2,080 ($2,000 x
.04213431463 = $84.27 plus $2,000
rounded down to $2,080), and the ad-
justed $3,000 amount in § 4980H(b)(1) is
$3,120 ($3,000 x .04213431463 =
$126.40 plus $3,000 rounded down to

$3,120). For calendar year 2016, the ad-
justed $2,000 amount in § 4980H(c)(1) is
$2,160 ($2,000 x .08316047520 =
$166.32 plus $2,000 rounded down to
$2,160), and the adjusted $3,000 amount
in § 4980H(b)(1) is $3,240 ($3,000 x
.08316047520 = $249.48 plus $3,000
rounded down to $3,240). Treasury and
IRS anticipate that adjustments for future
years will be posted on the IRS.gov web-
site.

Question 14: To determine status as a
full-time employee for purposes of
§ 4980H, § 54.4980H-1(a)(24) provides
that the term "hour of service" means each
hour for which an employee is paid, or
entitled to payment, for the performance
of duties for the employer, and each hour
for which the employee is paid, or entitled
to payment by the employer, for a period
of time during which no duties are per-
formed due to vacation, holiday, illness,
incapacity (including disability), layoff,
jury duty, military duty, or leave of ab-
sence (as defined in 29 CFR 2530.200b-
2(a)). To what extent are the rules under
29 CFR 2530.200b-2(a) incorporated into
the definition of hour of service under
§ 4980H?

Answer 14: The definition of hour of
service under § 54.4980H-1(a)(24), and
specifically the reference to 29 CFR
2530.200b-2(a), was intended to provide
parallels between the two regulatory pro-
visions on the basic definition of an hour
of service, without incorporating certain
mechanical rules contained in the DOL
regulations that do not fit into the general
structure of § 4980H and specifically the
identification of employees as full-time
employees. This Q&A-14 clarifies how
this reference to the DOL regulations ap-
plies. Treasury and IRS intend to include
these clarifications as proposed regula-
tions under § 4980H effective as of De-
cember 16, 2015.

The § 4980H regulations did not incor-
porate the provisions of 29 CFR
2530.200b-2(a)(2) that require hours of
service to be credited for certain periods
of time during which no duties are per-
formed "irrespective of whether the em-
ployment relationship has terminated."
Because the purpose of the crediting of

9See 79 FR 13744, 13802 (Mar. 11, 2014).

10See 80 FR 10750, 10825 (Feb. 27, 2015).

hours of service is to determine whether a
current employee is a full-time employee
(and to accumulate the hours of service of
current non-full-time employees to calcu-
late an employer's number of full-time
equivalent employees), an hour of service
for purposes of § 4980H does not include
any hours after the individual terminates
employment with the employer.

The reference to 29 CFR 2530.200b-
2(a) is intended to incorporate the limita-
tions of 29 CFR 2530.200b-2(a)(2)(ii)
and (iii) which are substantive exclusions
of the type of payments the right to which
will not result in an hour of service. Ac-
cordingly, an hour of service does not
include (1) an hour for which an employee
is directly or indirectly paid, or entitled to
payment, on account of a period during
which no duties are performed if such
payment is made or due under a plan
maintained solely for the purpose of com-
plying with applicable workmen's com-
pensation, or unemployment or disability
insurance laws; and (2) an hour of service
for a payment which solely reimburses an
employee for medical or medically related
expenses incurred by the employee.

However, the reference to 29 CFR
2530.200b-2(a) was not intended to incor-
porate the limitation on hours of service
contained in 29 CFR 2530.200b-
2(a)(2)(i), which is not a substantive part
of the definition of an hour of service but
instead a mechanical limitation on the
crediting of those hours appropriate in the
contexts to which the DOL regulations
apply but not with respect to § 4980H and
the definition of a full-time employee and
a full-time equivalent employee. Accord-
ingly, there is no 501-hour limit on the
hours of service required to be credited to
an employee on account of any single
continuous period during which the em-
ployee performs no duties if the hours of
service would otherwise qualify as hours
of service.11

Finally, the § 4980H regulations defin-
ing an "hour of service" are intended to
incorporate the remaining provisions of
29 CFR 2530.200b-2 relating to the
source of the payment for the hour of
service for which no duties were per-
formed. For purposes of determining

whether an hour of service must be cred-
ited, a payment is deemed to be made by
or due from an employer regardless of
whether the payment is made by or due
from the employer directly, or indirectly
through, among others, a trust fund or
insurer to which the employer contributes
or pays premiums, and regardless of
whether contributions made or due to the
trust fund, insurer, or other entity are for
the benefit of particular employees or are
on behalf of a group of employee in the
aggregate.

Accordingly, periods during which an
individual is not performing services but
is receiving payments due to short-term
disability or long-term disability result in
hours of service for any part of the period
during which the recipient retains status as
an employee of the employer, unless the
payments are made from an arrangement
to which the employer did not contribute
directly or indirectly. For this purpose, a
disability arrangement for which the em-
ployee paid with after-tax contributions
(so that the benefits received under the
arrangement are excluded from income
under § 104(a)(3)) would be treated as an
arrangement to which the employer did
not contribute, and payments from the ar-
rangement would not give rise to hours of
service. Periods during which the em-
ployee is not performing services but is
receiving payments in the form of workers
compensation wage replacement benefits
under a program provided by the state or
local government do not result in hours of
service.

Question 15: Is an employee who pri-
marily performs services for one or more
educational organizations but is not the
employee of the educational organiza-
tion(s) (because, for example, the individ-
ual is an employee of a staffing agency)
subject to the special rehire rules under
§§ 54.4980H-3(c)(4)(ii) and 54.4980H-
3(d)(6) (and the related definition of "em-
ployment break period" at § 54.4980H-
1(a)(17)) and thus only treated as a new
employee after a break of at least 26 con-
secutive weeks and, if the employer is
using the lookback measurement method,
subject to the special hours of service av-
eraging rules?

Answer 15: Treasury and IRS intend to
amend the regulations under § 4980H to
address the application of the special re-
hire rules under §§ 54.4980H-3(c)(4)(ii)
and 54.4980H-3(d)(6)(ii) to employees
who primarily perform services for one or
more educational organizations.

Because Treasury and IRS have con-
cluded that it would not be appropriate for
employees who had become eligible for
coverage prior to a break in service to be
subjected to a new period of exclusion
from a plan (which applies in certain cir-
cumstances for new employees) based
upon a brief break in service, Treasury
and IRS adopted rehire rules under which
an employee may be treated as a new
employee only after a break in service of
at least 13 weeks. Treasury and IRS con-
cluded, however, that without special re-
hire rules, this general rehire rule may be
inequitable to employees of educational
organizations who had become eligible
for coverage prior to the break. Similarly,
Treasury and IRS concluded that without
special rules under the lookback measure-
ment method for employees of educa-
tional organizations, application of those
rules could be inequitable to those employ-
ees if, for purposes of determining the av-
erage weekly hours of service over the en-
tire lookback period, employers counted the
summer recess periods (or other periods)
during which some of these employees may
not provide services as periods during which
no hours of service were performed. To
provide more appropriate rules for employ-
ees of educational organizations, the final
regulations under § 4980H provide two spe-
cial rules.

Sections 54.4980H-3(c)(4)(ii) and
54.4980H-3(d)(6)(ii)(A) address the
treatment of a new employee after a pe-
riod of absence for employees of educa-
tional organizations for purposes of deter-
mining the status of these employees as
full-time employees, under both the
monthly measurement method and the
lookback measurement method. These
sections provide that for an employer that
is an educational organization, an em-
ployee who resumes providing service to
(or is otherwise credited with an hour of
service for) an applicable large employer

11Note, however, that the 501-hour limit on hours of service required to be credited to an employee of an educational organization during employment break periods in a calendar year under
§ 54.4980H-3(c)(6)(ii)(B) continues to apply.

after a period during which the individual
was not credited with any hours of service
may be treated as having terminated em-
ployment and having been rehired, and
therefore may be treated as a new em-
ployee upon the resumption of services,
only if the employee did not have an
hour of service for the applicable large
employer for a period of at least 26
consecutive weeks immediately preced-
ing the resumption of services. Section
54.4980H-3(d)(6)(ii)(B) applies to edu-
cational organizations applying the
lookback measurement method of deter-
mining full-time employee status and
provides special rules to account for the
periods during which the employee may
not be providing services, such as a
summer break period.

Treasury and IRS have been made
aware that some educational organizations
are attempting to avoid application of
these rules by, for example, using a third-
party staffing agency for certain individu-
als providing services. Because the staff-
ing agency is not an educational
organization subject to the special rule,
the staffing agency could apply the look-
back measurement method or the rules on
new hires to treat some or all of these
individuals as failing to be full-time em-
ployees or as new employees after a break
in service of less than 26 weeks. In some
cases, the facts and circumstances may
demonstrate that the staffing agency is not
the common law employer of the individ-
ual for purposes of § 4980H, but rather
that the individual remains the employee
of the educational organization and the
special lookback measurement rule and
rehire rule would continue to apply. But
even if the individuals are the employees
of the staffing agency or other third party,
this structure would circumvent the intent
of the special rules. Accordingly, Trea-
sury and IRS intend to propose amend-
ments to the regulations under § 4980H to
provide for application of the special rule
in certain circumstances in which the ser-
vices are being provided to one or more
educational organizations, even if the em-
ployer is not an educational organization.
The amendments will apply as of the ap-
plicability date specified in the regula-
tions, but in no event will the applicability
date be earlier than the first plan year

beginning after the date on which the pro-
posed regulations are issued.

Specifically, Treasury and IRS antici-
pate amending the regulations under
§ 4980H to provide that the special rules
under §§ 54.4980H-3(c)(4)(ii) and
54.4980H-3(d)(6)(ii) (and the related def-
inition of "employment break period" at
§ 54.4980H-1(a)(17)) apply not only to
employees of educational organizations,
but also to any employee providing ser-
vices primarily to one or more educational
organizations for whom a meaningful op-
portunity to provide services during the
entire year (to an educational organization
or any other type of service recipient) is
not made available. For example, the spe-
cial rule would apply to an employer with
respect to a bus driver who is primarily
placed to provide bus driving services, or
a cafeteria worker who is primarily placed
to provide services in a cafeteria, at one or
more educational organizations and who
is not provided a meaningful opportunity
to provide services during one or more
months of the calendar year (for example,
the summer recess period). In contrast, an
employer that primarily places bus drivers
or cafeteria workers at educational orga-
nizations would not apply the special rule
to an employee if the individual was of-
fered a meaningful opportunity to provide
services during all months of the year (for
example, in the case of a cafeteria worker,
by working at a hospital cafeteria during
the summer recess period of the educa-
tional organization at which the individual
generally is placed).

Question 16: Is an AmeriCorps mem-
ber providing services to a grantee receiv-
ing assistance under the national service
laws an employee (of either AmeriCorps
or the grantee) for purposes of the em-
ployer shared responsibility provisions of
§ 4980H?

Answer 16: No. The National and
Community Service Act provides that par-
ticipants in AmeriCorps programs are not
considered to be employees of the grantee
receiving assistance under the national
service laws through which the participant
is engaging in service (42 U.S.C.
§ 12511(30)(B)). Similarly, AmeriCorps
members generally are not considered
Federal employees and are not subject to
the provisions of law relating to Federal
employment. (See, e.g., 42 U.S.C.

§ 12620). Consistent with these provisions,
for purposes of § 4980H, participants in the
AmeriCorps programs are not employees of
the grantee receiving assistance through
AmeriCorps for which the participant is pro-
viding services.

Question 17: How is an offer of cov-
erage under TRICARE due to employ-
ment which results in eligibility for cov-
erage under TRICARE treated for
purposes of §§ 4980H and 6056?

Answer 17: For purposes of determin-
ing any potential liability under § 4980H
and for purposes of the related informa-
tion reporting requirements under § 6056,
an offer of coverage under TRICARE for
any month due to employment with an
employer that results in eligibility for
TRICARE is treated as an offer by that
employer of minimum essential coverage
under an eligible employer-sponsored
plan for that month.

## IV. GOVERNMENT ENTITIES, HEALTH SAVINGS ACCOUNTS, AND BENEFITS ADMINISTERED BY THE DEPARTMENT OF VETERANS AFFAIRS

Question 18: For purposes of deter-
mining whether an employer had 50 or
more full-time employees (including full-
time equivalents) in the previous year and
therefore is an applicable large employer
(or ALE member), § 4980H(c)(2)(C)(i)
and § 54.4980H-1(a)(16) require that em-
ployers apply the aggregation rules under
§ 414(b), (c), (m), and (o) and treat all the
aggregated employers as a single em-
ployer. How do these aggregation rules
apply to employers that are government
entities?

Answer 18: The aggregation rules un-
der § 414(b), (c), (m), and (o) provide that
(1) corporations that are part of a con-
trolled group of corporations, (2) groups
of other types of entities that are under
common control, and (3) members of an
affiliated service group, may in each case
be treated as a single employer for certain
employee benefit requirements. Section
4980H(c)(2)(C)(i) and § 54.4980H-
1(a)(16) apply these standards in deter-
mining whether an employer is an appli-
cable large employer (or ALE member).
The regulations under § 414(b), (c), (m),
and (o) do not specifically address the
application of these standards to govern-

ment entities. Accordingly, as provided in
section V.D of the preamble to the final
regulations under § 4980H, government en-
tities may apply a reasonable, good faith
interpretation of the employer aggregation
rules under § 414(b), (c), (m), and (o) for
purposes of determining whether a govern-
ment entity is an applicable large employer
or an ALE member, and thereby subject to
the employer shared responsibility provi-
sions under § 4980H and the related report-
ing requirements under § 6056.

If two government entities would inde-
pendently be applicable large employers
(because each of the entities, in the previ-
ous year, had 50 or more full-time em-
ployees, including full-time equivalents),
the aggregation analysis will be of limited
consequence. That is because each of
those two entities would be subject to
§ 4980H and the related reporting require-
ments under § 6056 regardless of the ag-
gregation analysis and any consequences
of application of the employer aggrega-
tion rules would be limited (generally rel-
evant only to the allocation of the reduc-
tion by 30 full-time employees for the
calculation of any assessable payment un-
der § 4980H(a) or the cap on any assess-
able payment under § 4980H(b)).

Question 19: Is a separate employer
identification number (EIN) required for
each government entity employer that is
subject to a reporting requirement (as an
applicable large employer or ALE mem-
ber, or if neither, because it has employees
receiving self-insured health coverage)?

Answer 19: Yes, each separate em-
ployer entity (not applying any aggrega-
tion rules) that is an applicable large em-
ployer (or ALE member), or that provides
self-insured health coverage to its employ-
ees, must use its own EIN for purposes of
the applicable reporting requirements. Ac-
cordingly, separate Forms 1094-C, Trans-
mittal of Employer-Provided Health Insur-
ance Offer and Coverage Information
Returns, must be filed by each employer
that is an ALE member of an applicable
large employer group, and each Form
1094-C must have a separate EIN that is
the EIN of the ALE member filing the
form. For example, assume that a state
treats the state executive and executive
agencies, the state judiciary, and the state
legislature as three separate employers
that are ALE members of the applicable

large employer group that reflects the state
government. Each of the three employers
is required to have a separate EIN and to
file the Forms 1094-C and 1095-C re-
flecting the EIN of the employer.

The analysis is not changed by a gov-
ernment entity's use of a designated gov-
ernment entity (DGE). In that case, the
government entity has transferred the re-
sponsibility for reporting to the DGE, but
the DGE is still reporting on behalf of the
government entity that retains its separate
status as an applicable large employer (or
ALE member) subject to the employer
shared responsibility provisions. For ex-
ample, if ten counties that are applicable
large employers enter into agreements
with a state government entity that the
state will be the DGE for each of the
counties, the state government entity
should file a Form 1094-C on behalf of
each of the counties (as well as a Form
1094-C on behalf of itself as an employer
of its own employees). Each Form
1094-C would list the name and EIN of
the state government entity as the DGE,
and the name and EIN of the county as the
employer. The Form 1094-C for each
county would be accompanied by the
Forms 1095-C for each employee of that
county and would identify the county as
the employer.

Question 20: Notice 2004-50, 2004-2
C.B. 196, Q&A-5 provides guidance on
the eligibility to contribute to an HSA of
an individual who is eligible to receive
medical benefits administered by the De-
partment of Veterans Affairs (VA), stating
that the individual is not eligible to make
HSA contributions for any month if the
individual has received medical benefits
from the VA at any time during the pre-
vious three months. Notice 2008-59,
2008-29 IRB 123, Q&A-9 clarified that
although an individual actually receiving
medical benefits from the VA at any time
in the previous three months generally is
not eligible to contribute to an HSA, the
disqualification rule does not apply if the
medical benefits consist solely of disre-
garded coverage or preventive care. Sec-
tion 4007(b) of the Surface Transportation
and Veterans Health Care Choice Im-
provement Act of 2015 (the Surface
Transportation Act) amends § 223 to pro-
vide that an individual shall not fail to be
treated as an eligible individual for any

period merely because the individual re-
ceives hospital care or medical services
under any law administered by the Secre-
tary of Veterans Affairs for a service-
connected disability (within the meaning
of § 101(16) of title 38, United States
Code).

How does § 4007(b) of the Surface
Transportation Act affect the prior guid-
ance on the interaction of the receipt of
VA health care and eligibility to contrib-
ute to an HSA?

Answer 20: As modified by the legis-
lation, an individual actually receiving
medical benefits from the VA is not dis-
allowed from making HSA contributions
if the medical benefits consist solely of (1)
disregarded coverage, (2) preventive care,
or (3) hospital care or medical services
under any law administered by the Secre-
tary of Veterans Affairs for service-
connected disability (within the meaning
of § 101(16) of title 38, United States
Code). Distinguishing between services
provided by the VA for service-connected
disabilities and other types of medical
care is administratively complex and bur-
densome for employers and HSA trustees
or custodians. Moreover, as a practical
matter, most care provided for veterans
who have a disability rating will be such
qualifying care. Consequently, as a rule
of administrative simplification, for pur-
poses of this rule, any hospital care or
medical services received from the VA
by a veteran who has a disability rating
from the VA may be considered to be
hospital care or medical services under a
law administered by the Secretary of
Veterans Affairs for service-connected
disability.

V. APPLICATION OF COBRA
CONTINUATION COVERAGE
RULES AND HEALTH FSA
CARRYOVERS AS PERMITTED BY
NOTICE 2013-71

Question 21: Notice 2013-71 modifies
the rules for cafeteria plans to allow a
carryover of up to $500 of unused
amounts remaining at the end of the plan
year in a health FSA. Section
54.4980B-2, Q&A-8(e) provides that a
health FSA is not obligated to make CO-
BRA continuation coverage available for
the plan year in which a qualifying event
occurs unless as of the date of the quali-

fying event, the amount the qualified ben-
eficiary may become entitled to receive
during the remainder of the plan year as a
benefit exceeds the amount the health
FSA may require to be paid for COBRA
continuation coverage for the remainder
of the plan year.

In determining the amount of the ben-
efit that a qualified beneficiary is entitled
to receive during a plan year, is any
amount that has been carried over from a
prior plan year as permitted by Notice
2013-71 included?

Answer 21: Yes. Any carryover
amount is included in determining the
amount of the benefit that a qualified ben-
eficiary is entitled to receive during the
remainder of the plan year in which a
qualifying event occurs. The following
example illustrates the application of this
rule:

Example. Facts: An employer maintains
a calendar year health FSA that qualifies as
an excepted benefit. Under the health FSA,
during the open season an employee has
elected to reduce salary by $2,500 for the
year. In addition, the employee carries over
$500 in unused benefits from the prior year.
Thus, the maximum benefit that the em-
ployee can become entitled to receive under
the health FSA for the entire year is $3,000.
The employee experiences a qualifying event
that is a termination of employment on May
31. As of that date, the employee had sub-
mitted $1,100 of reimbursable expenses un-
der the health FSA.

Conclusion: The maximum benefit that
the employee could become entitled to re-
ceive for the remainder of the year as a
benefit under the health FSA is $1,900
(($2,500 plus $500) minus $1,100).

Question 22: Section 4980B(f)(2)(C)
provides that the maximum amount that a
group health plan is permitted to charge
for COBRA continuation coverage is 102
percent of the applicable premium for the
period of COBRA continuation coverage.
Section 4980B(f)(4) generally defines
"applicable premium" as the cost to the
plan of providing coverage during such
period for similarly situated beneficiaries
who have not incurred a COBRA qualify-
ing event (nonCOBRA beneficiaries). Un-
der § 4980B(f)(4)(B), a self-insured plan
may base the applicable premium on a
reasonable estimate of the cost of provid-
ing coverage for nonCOBRA beneficia-
ries, provided that the reasonable estimate
is determined on an actuarial basis and
satisfies any other applicable requirements

under the regulations. An example under
Q&A-8(f) of § 54.49890B-2 illustrates
that with respect to a health FSA, an em-
ployer may base its reasonable estimate of
the cost of providing coverage for simi-
larly situated nonCOBRA beneficiaries on
the maximum amount available under the
health FSA for the period, taking into
account both the employee salary reduc-
tion and any additional employer contri-
bution.

What is the maximum amount that a
health FSA is permitted to require to be
paid for COBRA continuation coverage if
the maximum benefit that an employee is
entitled to receive under the health FSA
for the entire year includes carryover
amounts?

Answer 22: The maximum amount that
a health FSA is permitted to require to be
paid for COBRA continuation coverage
(that is, 102 percent of the applicable pre-
mium) does not include unused amounts
carried over from prior years. The appli-
cable premium is based solely on the sum
of the employee's salary reduction elec-
tion for the year and any nonelective em-
ployer contribution. The following exam-
ple illustrates the application of this rule:

Example. Facts: An employee elects sal-
ary reduction with respect to a health FSA of
$2,000. The employer provides a matching
contribution of $1,000. In addition, the em-
ployee carries over $500 in unused benefits
from the prior year. The employee experi-
ences a qualifying event that is a termination
of employment on May 31.

Conclusion: The maximum amount the
health FSA is permitted to require to be paid
for COBRA continuation coverage for the
remainder of the year is 102 percent of 1/12
of the applicable premium of $3,000 ($2,000
of employee salary reduction election plus
$1,000 of employer contributions) times the
number of months remaining in the year after
the qualifying event. The $500 of benefits
carried over from the prior year is not in-
cluded in the applicable premium.

Question 23: Is a health FSA that al-
lows carryovers of unused amounts for
similarly situated nonCOBRA beneficia-
ries obligated to allow a carryover of un-
used amounts to a qualified beneficiary
who elected COBRA continuation cover-
age with respect to the health FSA, even if
the result is that the COBRA continuation
coverage under the health FSA continues
beyond the plan year?

Answer 23: If a health FSA allows
carryovers of unused amounts for simi-

larly situated nonCOBRA beneficiaries,
notwithstanding § 54.4980B-2, Q&A-
8(d), the health FSA must allow carry-
overs by similarly situated COBRA ben-
eficiaries, subject to the same terms
applicable with respect to nonCOBRA
beneficiaries. However, the health FSA is
not required to allow a COBRA benefi-
ciary to elect additional salary reduction
amounts for the carryover period, or to
have access to any employer contributions
to the health FSA made during the carry-
over period. In addition, the carryover is
limited to the applicable COBRA contin-
uation period.

As noted in Q&A-22 of this notice,
the maximum amount that a health FSA
can require to be paid as the applicable
premium does not include unused
amounts carried over from prior years.
Thus, if a qualified beneficiary is al-
lowed a carryover of unused amounts to
a later year, the applicable premium for
that later year period is zero. The fol-
lowing example illustrates the applica-
tion of this rule.

Example. Facts: An employer maintains
a calendar year health FSA which qualifies as
an excepted benefit. Under the health FSA,
during the open season an employee may
elect to reduce salary by $2,500 for the year.
In addition, the plan allows a carryover of up
to $500 in unused benefits remaining at the
end of the plan year.

An employee elects salary reduction of
$2,500 for the year. The employee experi-
ences a qualifying event that is a termination
of employment on May 31. As of that date,
the employee had submitted $400 of reim-
bursable expenses under the health FSA. The
employee elects COBRA continuation cover-
age and pays the required premiums for the
rest of the year. As a qualified beneficiary,
the former employee submits additional re-
imbursable payments in the amount of
$1,600. At the end of the plan year, there is
$500 of unused benefits remaining.

Conclusion: The qualified beneficiary is
allowed to continue to submit expenses under
the same terms as similarly situated
nonCOBRA beneficiaries in the next year,
for up to $500 in reimbursable expenses. The
maximum amount that can be required as an
applicable premium for the carryover amount
for periods after the end of the plan year is
zero. The maximum period the carryover is
required to be made available is the period of
COBRA continuation coverage. In this case,
the period is 18 months and terminates at the
end of November of the next year. Thus, the
health FSA need not reimburse any expense
incurred after that November.

Question 24: May a health FSA con-
dition the ability to carry over unused
amounts on participation in the health
FSA in the next year?

Answer 24: Yes. A health FSA may
limit the availability of the carryover of
unused amounts (subject to the $500
limit) to individuals who have elected to
participate in the health FSA in the next
year, even if the ability to participate in
that next year requires a minimum salary
reduction election to the health FSA for
that next year.

Example. Facts: Employer sponsors a
cafeteria plan offering a health FSA that per-
mits up to $500 of unused health FSA
amounts to be carried over to the next year in
compliance with Notice 2013-71, but only if
the employee participates in the health FSA
during that next year. To participate in the
health FSA, an employee must contribute a
minimum of $60 ($5 per calendar month).
As of December 31, 2016, Employee A and
Employee B each have $25 remaining in
their health FSA. Employee A elects to
participate in the health FSA for 2017,
making a $600 salary reduction election.
Employee B elects not to participate in the
health FSA for 2015. Employee A has $25
carried over to the health FSA for 2017,
resulting in $625 available in the health
FSA. Employee B forfeits the $25 as of
December 31, 2016 and has no funds avail-
able in the health FSA thereafter.

Conclusion: This arrangement is a per-
missible health FSA carryover feature under
Notice 2013-71.

Question 25: May a health FSA limit
the ability to carry over unused amounts
to a maximum period?

Answer 25: Yes. A health FSA may
limit the ability to carry over unused
amounts to a maximum period (subject to
the $500 limit). For example, a health
FSA can limit the ability to carry over
unused amounts to one year. Thus, if an
individual carried over $30 and did not
elect any additional amounts for the next
year, the health FSA may require forfei-
ture of any amount remaining at the end of
that next year.

## VI. RELIEF RELATING TO EMPLOYER REPORTING

Question 26: For employer reporting
required under § 6056 (Forms 1094-C
and 1095-C), is relief available from pen-
alties for incomplete or incorrect returns
filed or statements furnished to employees
in 2016 for coverage offered (or not of-
fered) in calendar year 2015?

Answer 26: Yes. To assist with the
implementation of the information report-
ing requirements, Treasury and IRS have
provided certain relief applicable for re-
porting in early 2016 related to the cover-
age offered (or not offered) in calendar
year 2015. See preamble to the final reg-
ulations under § 6056, section XIII, 79 FR
13231, 13246 (Mar. 10, 2014). This relief
is intended to provide additional time to
develop appropriate procedures for collec-
tion of data and compliance with the new
reporting requirements. Accordingly, the
IRS will not impose penalties under
§§ 6721 and 6722 on ALE members that
can show that they have made good faith
efforts to comply with the information
reporting requirements. Specifically, relief
is provided from penalties under §§ 6721
and 6722 for returns and statements filed
and furnished in 2016 to report offers of
coverage in 2015 for incorrect or incom-
plete information reported on the return or
statement. This relief does not apply in the
case of ALE members that cannot show a
good faith effort to comply with the infor-
mation reporting requirements or that fail
to timely file an information return or fur-
nish a statement. However, consistent
with existing information reporting rules,
ALE members that fail to timely meet the
requirements still may be eligible for pen-
alty relief if the IRS determines that the
standards for reasonable cause under
§ 6724 are satisfied. Similar relief has also
been provided with respect to reporting on
coverage under § 6055. See preamble to
the regulations under § 6055, section 7, 79
FR 13220, 13226 (Mar. 10, 2014).

## VII. REQUEST FOR COMMENTS

Q&A-9, Q&A-12, Q&A-14, and
Q&A-15 of this notice provide certain
guidance that Treasury and IRS intend to
incorporate into proposed regulations.
These proposed regulations will provide
stakeholders an opportunity for comment
on the issues addressed in the proposed
regulations. However, to assist in devel-
opment of those proposed regulations,
Treasury and IRS request comments on
the guidance provided in those Q&As.

Public comments should be submitted
no later than February 28, 2016. Comments
should include a reference to Notice 2015-
87. Send submissions to CC:PA:LPD:PR
(Notice 2015-87), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington, DC 20044.
Submissions may be hand delivered Mon-
day through Friday between the hours of 8
a.m. and 4 p.m. to CC:PA:LPD:PR (Notice
2015-87), Courier's Desk, Internal Reve-
nue Service, 1111 Constitution Avenue,
NW, Washington, DC 20044, or sent elec-
tronically, via the following e-mail address:
Notice.comments@irscounsel.treas.gov.
Please include "Notice 2015-87" in the
subject line of any electronic communi-
cation. All material submitted will be avail-
able for public inspection and copying.

## VIII. APPLICABILITY DATE AND RELIANCE PERIOD

Except as otherwise explicitly pro-
vided in this notice, the guidance provided
in this notice applies for plan years begin-
ning on and after December 16, 2015, but
taxpayers may apply the guidance pro-
vided in this notice for all prior periods.

## IX. DRAFTING INFORMATION

The principal author of this notice is
Shad Fagerland of the Office of Associate
Chief Counsel (Tax Exempt and Govern-
ment Entities). For further information re-
garding this notice contact at (202) 317-
5500 (not a toll-free number).

## Part IV. Items of General Interest

Notice of Disposition of
Declaratory Judgment
Proceedings under Section
7428

### Announcement 2015-36

This announcement serves notice to do-
nors that on August 27, 2015, the United

States Tax Court entered an order dismiss-
ing the case involving the below-
referenced organization. The organization
listed below is not recognized as an orga-
nization described in section 501(c)(3), is
not exempt from tax under section 501(a),
and is not an organization described in
section 170(c)(2).

Congressional District Programs
Falls Church VA

# Definition of Terms

Revenue rulings and revenue procedures
(hereinafter referred to as "rulings") that
have an effect on previous rulings use the
following defined terms to describe the
effect:

Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).

Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confu-
sion. It is not used where a position in a
prior ruling is being changed.

Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.

Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).

Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.

Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.

Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a pe-
riod of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.

Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.

Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

# Abbreviations

The following abbreviations in current
use and formerly used will appear in ma-
terial published in the Bulletin.

A-Individual.

Acq .- Acquiescence.

B-Individual.

BE-Beneficiary.

F.R .- Federal Register.

FUTA-Federal Unemployment Tax Act.

FX-Foreign corporation.

G.C.M .- Chief Counsel's Memorandum.

GE-Grantee.

GP-General Partner.

GR-Grantor.

IC-Insurance Company.

I.R.B .- Internal Revenue Bulletin.

CY-County.

LE-Lessee.

LP-Limited Partner.

LR-Lessor.

M-Minor.

Nonacq .- Nonacquiescence.

O Organization.

P-Parent Corporation.

PHC-Personal Holding Company.

PO-Possession of the U.S.

PR-Partner.

PRS-Partnership.

PTE-Prohibited Transaction Exemption.
Pub. L .- Public Law.

REIT-Real Estate Investment Trust.

Rev. Proc .- Revenue Procedure.

Rev. Rul .- Revenue Ruling.

S-Subsidiary.

S.P.R .- Statement of Procedural Rules.

Stat .- Statutes at Large.

T-Target Corporation.

T.C .- Tax Court.

T.D .- Treasury Decision.

TFE-Transferee.

TFR-Transferor.

T.I.R .- Technical Information Release.

TP-Taxpayer.
TR-Trust.

TT-Trustee.

U.S.C .- United States Code.

DC-Dummy Corporation.

DE-Donee.

Del. Order-Delegation Order.

DISC-Domestic International Sales Corporation.
DR-Donor.

E-Estate.

EE-Employee.

E.O .- Executive Order.

ER-Employer.

ERISA-Employee Retirement Income Security Act.
EX-Executor.

F-Fiduciary.

FC-Foreign Country.

FICA-Federal Insurance Contributions Act.

FISC-Foreign International Sales Company.

FPH-Foreign Personal Holding Company.

BK-Bank.

B.T.A .- Board of Tax Appeals.

C-Individual.

C.B .- Cumulative Bulletin.

CFR-Code of Federal Regulations.

CI-City.

COOP-Cooperative.

Ct.D .- Court Decision.

D-Decedent.

X-Corporation.

Y-Corporation.

Z-Corporation.

Numerical Finding List1

Notices :- Continued

Revenue Procedures :- Continued

Bulletins 2015-27 through 2015-52

2015-74, 2015-46 I.R.B. 663

2015-53, 2015-44 I.R.B. 615

2015-75, 2015-46 I.R.B. 668

2015-54, 2015-45 I.R.B. 648

Announcements:

2015-76, 2015-46 I.R.B. 669

2015-55, 2015-49 I.R.B. 788

2015-77, 2015-47 I.R.B. 676

2015-56, 2015-49 I.R.B. 827

2015-17, 2015-28 I.R.B. 67

2015-78, 2015-48 I.R.B. 690

2015-57, 2015-51 I.R.B. 863

2015-18, 2015-33 I.R.B. 198

2015-79, 2015-49 I.R.B. 775

2015-19, 2015-32 I.R.B. 157

2015-80, 2015-48 I.R.B. 691

Revenue Rulings:

2015-20, 2015-38 I.R.B. 355

2015-81, 2015-49 I.R.B. 784

2015-21, 2015-34 I.R.B. 220

2015-82, 2015-50 I.R.B. 859

2015-15, 2015-27 I.R.B. 1

2015-22, 2015-35 I.R.B. 288

2015-83, 2015-51 I.R.B. 861

2015-16, 2015-31 I.R.B. 130

2015-23, 2015-36 I.R.B. 311

2015-84, 2015-52 I.R.B. 880

2015-17, 2015-39 I.R.B. 358

2015-24, 2015-36 I.R.B. 313

2015-85, 2015-52 I.R.B. 884

2015-18, 2015-34 I.R.B. 209

2015-25, 2015-39 I.R.B. 422

2015-86, 2015-52 I.R.B. 887

2015-19, 2015-36 I.R.B. 291

2015-26, 2015-47 I.R.B. 677

2015-87, 2015-52 I.R.B. 889

2015-20, 2015-38 I.R.B. 353

2015-27, 2015-48 I.R.B. 694

2015-21, 2015-40 I.R.B. 447

2015-28, 2015-46 I.R.B. 673

Proposed Regulations:

2015-22, 2015-44 I.R.B. 610

2015-29, 2015-46 I.R.B. 673

2015-23, 2015-52 I.R.B. 866

2015-30, 2015-46 I.R.B. 673

REG-140379-02, 2015-45 I.R.B. 653

2015-24, 2015-48 I.R.B. 687

2015-31, 2015-49 I.R.B. 841

REG-134219-08, 2015-49 I.R.B. 842

2015-25, 2015-49 I.R.B. 695

2015-32, 2015-49 I.R.B. 841

REG-136459-09, 2015-37 I.R.B. 332

2015-26, 2015-49 I.R.B. 696

2015-33, 2015-49 I.R.B. 842

REG-155164-09, 2015-41 I.R.B. 560

2015-34, 2015-51 I.R.B. 865

REG-109370-10, 2015-33 I.R.B. 198

Treasury Decisions:

2015-35, 2015-51 I.R.B. 865

REG-112997-10, 2015-39 I.R.B. 422

2015-36, 2015-52 I.R.B. 904

REG-103033-11, 2015-37 I.R.B. 325

9723, 2015-31 I.R.B. 84

REG-109813-11, 2015-37 I.R.B. 330

9726, 2015-31 I.R.B. 98

Notices:

REG-138344-13, 2015-41 I.R.B. 557

9727, 2015-32 I.R.B. 154

REG-139483-13, 2015-40 I.R.B. 475

9728, 2015-33 I.R.B. 169

2015-43, 2015-29 I.R.B. 73

REG-148998-13, 2015-45 I.R.B. 653

9729, 2015-35 I.R.B. 221

2015-46, 2015-28 I.R.B. 64

REG-115452-14, 2015-32 I.R.B. 158

9730, 2015-35 I.R.B. 223

2015-47, 2015-30 I.R.B. 76

REG-127895-14, 2015-41 I.R.B. 556

9731, 2015-37 I.R.B. 314

2015-48, 2015-30 I.R.B. 77

REG-132075-14, 2015-35 I.R.B. 288

9732, 2015-39 I.R.B. 371

2015-49, 2015-30 I.R.B. 79

REG-138526-14, 2015-28 I.R.B. 67

9733, 2015-41 I.R.B. 494

2015-50, 2015-30 I.R.B. 81

REG-143800-14, 2015-37 I.R.B. 347

9734, 2015-41 I.R.B. 500

2015-51, 2015-31 I.R.B. 133

REG-102648-15, 2015-31 I.R.B. 134

9735, 2015-37 I.R.B. 316

2015-52, 2015-35 I.R.B. 227

REG-102837-15, 2015-27 I.R.B. 43

9736, 2015-39 I.R.B. 402

2015-53, 2015-33 I.R.B. 190

REG-121496-15, 2015-46 I.R.B. 674

9737, 2015-40 I.R.B. 449

2015-54, 2015-34 I.R.B. 210

REG-123640-15, 2015-37 I.R.B. 350

9738, 2015-40 I.R.B. 453

2015-55, 2015-34 I.R.B. 217

9739, 2015-41 I.R.B. 528

2015-56, 2015-35 I.R.B. 235

Revenue Procedures:

9740, 2015-42 I.R.B. 573

2015-57, 2015-36 I.R.B. 294

9741, 2015-45 I.R.B. 628

2015-58, 2015-37 I.R.B. 322

2015-34, 2015-27 I.R.B. 4

9742, 2015-46 I.R.B. 657

2015-59, 2015-40 I.R.B. 459

2015-36, 2015-27 I.R.B. 20

9743, 2015-48 I.R.B. 679

2015-60, 2015-43 I.R.B. 604

2015-38, 2015-36 I.R.B. 295

9744, 2015-49 I.R.B. 700

2015-61, 2015-39 I.R.B. 408

2015-39, 2015-33 I.R.B. 195

2015-62, 2015-39 I.R.B. 411

2015-40, 2015-35 I.R.B. 236

2015-63, 2015-40 I.R.B. 461

2015-41, 2015-35 I.R.B. 263

2015-64, 2015-40 I.R.B. 464

2015-42, 2015-36 I.R.B. 310

2015-65, 2015-40 I.R.B. 466

2015-43, 2015-40 I.R.B. 467

2015-66, 2015-41 I.R.B. 541

2015-44, 2015-38 I.R.B. 354

2015-67, 2015-41 I.R.B. 546

2015-45, 2015-39 I.R.B. 412

2015-68, 2015-41 I.R.B. 547

2015-46, 2015-39 I.R.B. 414

2015-69, 2015-41 I.R.B. 550

2015-47, 2015-39 I.R.B. 419

2015-70, 2015-43 I.R.B. 604

2015-48, 2015-40 I.R.B. 469

2015-71, 2015-43 I.R.B. 606

2015-49, 2015-41 I.R.B. 555

2015-72, 2015-44 I.R.B. 613

2015-50, 2015-42 I.R.B. 583

2015-73, 2015-46 I.R.B. 660

2015-51, 2015-42 I.R.B. 583

2015-52, 2015-45 I.R.B. 638

1A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-01 through 2015-26 is in Internal Revenue Bulletin
2015-26, dated June 29, 2015.

## Finding List of Current Actions on

## Revenue Procedures :- Continued

Treasury Decisions :- Continued

Previously Published Items1

2006-54

66-284

Bulletins 2015-27 through 2015-52

Superseded by

Obsoleted by

Rev. Proc. 2015-40, 2015-35 I.R.B. 236

T.D. 9739 2015-41 I.R.B. 528

Notices:

2008-31

79-250

2011-55

Modified by

Obsoleted by

Amplified by

Rev. Proc. 2015-41, 2015-35 I.R.B. 263

T.D. 9739 2015-41 I.R.B. 528

Notice 2015-77, 2015-47 I.R.B. 676

2008-31

79-289

2012-48

Superseded by

Obsoleted by

Modified by

Rev. Proc. 2015-41, 2015-35 I.R.B. 263

T.D. 9739 2015-41 I.R.B. 528

Notice 2015-83, 2015-51 I.R.B. 861

2011-49

96-29

2013-7

Modified by

Obsoleted by

Amplified by

Rev. Proc. 2015-36, 2015-27 I.R.B. 20

T.D. 9739 2015-41 I.R.B. 528

Notice 2015-77, 2015-47 I.R.B. 676

2011-49

2014-4

Superseded by

Modified by

Rev. Proc. 2015-36, 2015-27 I.R.B. 20

Notice 2015-51, 2015-31 I.R.B. 133

2015-8

2014-17

Superseded by

Rev. Proc. 2015-55, 2015-49 I.R.B. 788

Notice 2015-67, 2015-41 I.R.B. 546

2015-14

Proposed Regulations:

Modified by

Rev. Proc. 2015-39, 2015-33 I.R.B. 195

2009-57

Obsoleted by

2015-14

REG-112997-10 2015-39 I.R.B. 422

Modified by

Rev. Proc. 2015-56, 2015-49 I.R.B. 827

2013-17

Obsoleted by

REG-148998-13 2015-45 I.R.B. 653

2015-18

Superseded by

Revenue Procedures:

Rev. Proc. 2015-55, 2015-49 I.R.B. 788

1992-75

2015-40

Clarified by

Amplified by

Rev. Proc. 2015-40, 2015-35 I.R.B. 236

Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2003-40

2015-41

Modified by

Amplified by

Rev. Proc. 2015-40, 2015-35 I.R.B. 236

2003-78

Revenue Rulings:

Modified by

Rev. Proc. 2015-46, 2015-39 I.R.B. 414

2014-30

Supplemented by

2006-9

Rev. Rul. 2015-24, 2015-48 I.R.B. 687

Modified by

Rev. Proc. 2015-41, 2015-35 I.R.B. 263

2014-30

Superseded by

2006-9

Rev. Rul. 2015-24, 2015-48 I.R.B. 687

Superseded by

Rev. Proc. 2015-41, 2015-35 I.R.B. 263

Treasury Decisions:

2006-54

58-422

Modified by

Obsoleted by

Rev. Proc. 2015-40, 2015-35 I.R.B. 236

T.D. 9739 2015-41 I.R.B. 528

"A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2015-01 through 2015-26 is in Internal Revenue Bulletin
2015-26, dated June 29, 2015.

# Internal Revenue Service Washington, DC 20224

Official Business
Penalty for Private Use, $300

# INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.

# We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we
would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
(www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.

Internal Revenue Bulletin 2015-52 (PDF rendition): IRS Notices

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