Notice 2010-38

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Notice 2010-38 provides guidance on the tax treatment of health coverage for children up to age 27 under PPACA.

Specifically, the Notice provides guidance on the amendment of § 105(b) of the Code, effective March 30, 2010, to extend the general exclusion from gross income for reimbursements for medical care under an employer-provided accident or health plan to any employee’s child who has not attained age 27 as of the end of the taxable year. (See § 1004(d) of HCERA.)

PPACA also makes parallel amendments, effective March 30, 2010, to Code Section 401(h) for retiree health accounts in pension plans, to Code Section 501(c)(9) for voluntary employees’ beneficiary associations (VEBAs), and to Code Section 162(l) for deductions by self-employed individuals for medical care insurance. (See § 1004(d) of HCERA.)