I did mention section 1001 was a doozy – right?
The next part Section 1001 discusses the prohibition of discrimination in favor of highly compensated individuals. In order to understand this portion of the PPACA, we have to delve into the Internal Revenue Code of 1986. I hope that we are not like the dwarves of, sorry – this should be Mines of Moria, Helm’s Deep, and dig too deep. (My Lord of the Rings knowledge is slacking – must watch all three movies in a row!)
The Internal Revenue Code of 1986 is the name Congress gave to the Internal Revenue Code of 1954 when they updated it in, you guessed it, 1986. (The Federal Government is renowned across the world for its inventive naming system.) It is also referred to as Title 26 of United States Code. Because one name isn’t confusing enough. The PPACA refers to section 105(h)(2) of the aforementioned IRC of 1986 in describing what requirements group health plans under the new system have with regards to highly compensated individuals.
So one implication of this is whether or not the awesome health care provided to the highest paid officers of a business, among others, counts as income for purposes of taxation. It does not, assuming that the business does not discriminate solely in favor of providing health care to the fancy pants employees, and leave the regular joes and joettes alone in the dark, crying out for their Lipitor. Health care plans are not allowed to give great care to the people in charge, and not include everyone else. In any case, the CEO must declare the excess reimbursement for the personal doctor that flies with her on the jet, and pay the Tax Man. (These prohibitions have always applied to self-funded insurance plans, but this part adapts and applies them to group health insurance plans as well).
The next section on ensuring Quality of Care has some nifty stuff about the 2nd Amendment in it, so we’ll save that for tomorrow. (Who knew that guns were so healthy!)
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