Internal Revenue Bulletin 2019-42 (PDF rendition): IRS Revenue Procedures

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing. Whole bulletin rendition: numbered items are identified below; other legal material and publisher context remain included. This is not a new standalone advance release.

Bulletin No. 2019–42
October 15, 2019
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.
EMPLOYMENT PLANS
REG-136401-18, page 960.
This document sets forth proposed regulations to clarify
the application of the employer shared responsibility provi-
sions under Internal Revenue Code (Code) section 4980H
and the nondiscrimination rules under Code section 105(h)
to health reimbursement arrangements (HRAs) and other
account-based group health plans integrated with individual
health insurance coverage or Medicare (individual coverage
HRAs) and to provide certain safe harbors with respect to
the application of those provisions to individual coverage
HRAs. The proposed regulations are intended to facilitate
the adoption of individual coverage HRAs by employers, and
taxpayers generally are permitted to rely on the proposed
regulations.
Rev. Proc. 2019-39, page 945.
This revenue procedure sets forth a system of recurring re-
medial amendment periods for correcting form defects in a §
403(b) plan (both for § 403(b) individually designed plans and
§ 403(b) pre-approved plans) first occurring after March 31,
2020 (the ending date for the initial remedial amendment pe-
riod under Rev. Proc. 2013-22, 2013-18 I.R.B. 985). It also
provides a limited extension of the initial remedial amend-
ment period for certain form defects. Further, as contem-
plated by section 16.01 of Rev. Proc. 2013-22, this revenue
procedure establishes a system of § 403(b) pre-approved
plan cycles under which a § 403(b) pre-approved plan spon-
sor may submit a proposed § 403(b) pre-approved plan for
review and approval by the IRS, which, once approved, may
be made available for adoption by eligible employers. This
revenue procedure also provides deadlines for the adoption
of plan amendments for § 403(b) individually designed plans
and § 403(b) pre-approved plans.
INCOME TAX
Action On Decision 2019-3, page 934.
Nonacquiescence to the holding that the transfer of a
non-capital asset is treated as the sale or exchange of a
capital asset under I.R.C. § 1253(a) if the transferor does
not retain any significant power, right, or continuing interest
in the asset.
Notice 2019-54, page 935.
This notice explains the circumstances under which the four-
year replacement period under section 1033(e)(2) is extend-
ed for livestock sold on account of drought. The Appendix
to this notice contains a list of counties that experienced ex-
ceptional, extreme, or severe drought conditions during the
12-month period ending August 31, 2019. Taxpayers may
use this list to determine if any extension is available.
Notice 2019-55, page 937.
Optional special per diem rates. This notice provides the
2019-2020 special per diem rates for taxpayers to use in
substantiating the amount of ordinary and necessary busi-
ness expenses incurred while traveling away from home. The
notice includes (1) the special transportation industry rate,
(2) the rate for the incidental expenses only deduction, and
(3) the rates and list of high-cost localities for the high-low
substantiation method.
Rev. Proc. 2019- 38, page 942.
This revenue procedure provides for a safe harbor under
which a rental real estate enterprise will be treated as a trade
or business solely for purposes of section 199A of the Inter-
nal Revenue Code (Code). To qualify for treatment as a trade
or business under this safe harbor, the rental real estate en-
terprise must satisfy the requirements of the revenue pro-
cedure. If an enterprise fails to satisfy these requirements,
the rental real estate enterprise may still be treated as a
trade or business for purposes of section 199A if the enter-
prise otherwise meets the definition of trade or business in
§ 1.199A-1(b)(14).
Finding Lists begin on page ii.

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 of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, 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 sub-
stantive 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 inter-
nal management are not published; however, statements of
internal 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 rul-
ings to taxpayers or technical advice to Service field offices,
identifying 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,
Legislation 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
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (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.
October 15, 2019 Bulletin No. 2019–42

Actions Relating to
Court Decisions
It is the policy of the Internal Reve-
nue Service to announce at an early date
whether it will follow the holdings in cer-
tain cases. An Action on Decision is the
document making such an announcement.
An Action on Decision will be issued at
the discretion of the Service only on un-
appealed issues decided adverse to the
government. Generally, an Action on De-
cision is issued where its guidance would
be helpful to Service personnel working
with the same or similar issues. Unlike a
Treasury Regulation or a Revenue Ruling,
an Action on Decision is not an affirma-
tive statement of Service position. It is not
intended to serve as public guidance and
may not be cited as precedent.
Actions on Decisions shall be relied
upon within the Service only as conclu-
sions applying the law to the facts in the
particular case at the time the Action on
Decision was issued. Caution should be
exercised in extending the recommenda-
tion of the Action on Decision to similar
cases where the facts are different. More-
over, the recommendation in the Action
on Decision may be superseded by new
legislation, regulations, rulings, cases, or
Actions on Decisions.
Prior to 1991, the Service published
acquiescence or nonacquiescence only in
certain regular Tax Court opinions. The
Service has expanded its acquiescence
program to include other civil tax cases
where guidance is determined to be help-
ful. Accordingly, the Service now may
acquiesce or nonacquiesce in the holdings
of memorandum Tax Court opinions, as
well as those of the United States District
Courts, Claims Court, and Circuit Courts
of Appeal. Regardless of the court decid-
ing the case, the recommendation of any
Action on Decision will be published in
the Internal Revenue Bulletin.
The recommendation in every Action
on Decision will be summarized as ac-
quiescence, acquiescence in result only,
or nonacquiescence. Both “acquiescence”
and “acquiescence in result only” mean
that the Service accepts the holding of the
court in a case and that the Service will
follow it in disposing of cases with the
same controlling facts. However, “acqui-
escence” indicates neither approval nor
disapproval of the reasons assigned by the
court for its conclusions; whereas, “acqui-
escence in result only” indicates disagree-
ment or concern with some or all of those
reasons. “Nonacquiescence” signifies that,
although no further review was sought,
the Service does not agree with the hold-
ing of the court and, generally, will not
follow the decision in disposing of cases
involving other taxpayers. In reference to
an opinion of a circuit court of appeals, a
“nonacquiescence” indicates that the Ser-
vice will not follow the holding on a na-
tionwide basis. However, the Service will
recognize the precedential impact of the
opinion on cases arising within the venue
of the deciding circuit.
The Commissioner does NOT ACQUI-
ESCE in the following decision:
GreenTeam Materials Recovery Fa-
cility PN, GreenWaste Recovery, Inc.,
Tax Matters Partner, et al. v. Commis-
sioner,
1
T.C. Memo. 2017-122
1
Nonacquiescence to the holding that the transfer of a non-capital asset is treated as the sale or exchange of a capital asset under I.R.C. § 1253(a) if the transferor does not retain any signifi-
cant power, right, or continuing interest in the asset.
October 15, 2019 934 Bulletin No. 2019–42

Part III
Extension of Replacement
Period for Livestock Sold
on Account of Drought
Notice 2019- 54
SECTION 1. PURPOSE
This notice provides guidance regard-
ing an extension of the replacement period
under § 1033(e) of the Internal Revenue
Code for livestock sold on account of
drought in specified counties.
SECTION 2. BACKGROUND
.01 Nonrecognition of Gain on Invol-
untary Conversion of Livestock. Section
1033(a) generally provides for nonrecog-
nition of gain when property is involun-
tarily converted and replaced with prop-
erty that is similar or related in service
or use. Section 1033(e)(1) provides that
a sale or exchange of livestock (other
than poultry) held by a taxpayer for draft,
breeding, or dairy purposes in excess of
the number that would be sold following
the taxpayer’s usual business practices is
treated as an involuntary conversion if the
livestock is sold or exchanged solely on
account of drought, flood, or other weath-
er-related conditions.
.02 Replacement Period. Section
1033(a)(2)(A) generally provides that
gain from an involuntary conversion is
recognized only to the extent the amount
realized on the conversion exceeds the
cost of replacement property purchased
during the replacement period. If a sale or
exchange of livestock is treated as an in-
voluntary conversion under § 1033(e)(1)
and is solely on account of drought, flood,
or other weather-related conditions that
result in the area being designated as eli-
gible for assistance by the federal govern-
ment, § 1033(e)(2)(A) provides that the
replacement period ends four years after
the close of the first taxable year in which
any part of the gain from the conversion
is realized. Section 1033(e)(2)(B) pro-
vides that the Secretary may extend this
replacement period on a regional basis for
such additional time as the Secretary de-
termines appropriate if the weather-relat-
ed conditions that resulted in the area be-
ing designated as eligible for assistance by
the federal government continue for more
than three years. Section 1033(e)(2) is ef-
fective for any taxable year with respect
to which the due date (without regard to
extensions) for a taxpayer’s return is after
December 31, 2002.
SECTION 3. EXTENSION OF
REPLACEMENT PERIOD UNDER §
1033(e)(2)(B)
Notice 2006-82, 2006-2 C.B. 529,
provides for extensions of the replace-
ment period under § 1033(e)(2)(B). If a
sale or exchange of livestock is treated as
an involuntary conversion on account of
drought and the taxpayer’s replacement
period is determined under § 1033(e)(2)
(A), the replacement period will be ex-
tended under § 1033(e)(2)(B) and Notice
2006-82 until the end of the taxpayer’s
first taxable year ending after the first
drought-free year for the applicable re-
gion. For this purpose, the first drought-
free year for the applicable region is the
first 12-month period that (1) ends August
31; (2) ends in or after the last year of the
taxpayer’s four-year replacement period
determined under § 1033(e)(2)(A); and
(3) does not include any weekly period
for which exceptional, extreme, or se-
vere drought is reported for any location
in the applicable region. The applicable
region is the county that experienced the
drought conditions on account of which
the livestock was sold or exchanged and
all counties that are contiguous to that
county.
A taxpayer may determine whether ex-
ceptional, extreme, or severe drought is
reported for any location in the applicable
region by reference to U.S. Drought Mon-
itor maps that are produced on a weekly
basis by the National Drought Mitigation
Center. U.S. Drought Monitor maps are
archived at http://droughtmonitor.unl.edu/
Maps/MapArchive.aspx.
In addition, Notice 2006-82 provides
that the Internal Revenue Service will
publish in September of each year a list of
counties
1
for which exceptional, extreme,
or severe drought was reported during the
preceding 12 months. Taxpayers may use
this list instead of U.S. Drought Monitor
maps to determine whether exceptional,
extreme, or severe drought has been re-
ported for any location in the applicable
region.
The Appendix to this notice contains
the list of counties for which exceptional,
extreme, or severe drought was reported
during the 12-month period ending Au-
gust 31, 2019. Under Notice 2006-82,
the 12-month period ended on August 31,
2019, is not a drought-free year for an ap-
plicable region that includes any county
on this list. Accordingly, for a taxpayer
who qualified for a four-year replacement
period for livestock sold or exchanged on
account of drought and whose replace-
ment period is scheduled to expire at the
end of 2019 (or, in the case of a fiscal
year taxpayer, at the end of the taxable
year that includes August 31, 2019), the
replacement period will be extended un-
der § 1033(e)(2) and Notice 2006-82 if the
applicable region includes any county on
this list. This extension will continue until
the end of the taxpayer’s first taxable year
ending after a drought-free year for the ap-
plicable region.
SECTION 4. DRAFTING
INFORMATION
The principal author of this notice
is Lewis Saideman of the Office of As-
sociate Chief Counsel (Income Tax &
Accounting). For further information
regarding this notice, please contact Mr.
Saideman at (202) 317-7006 (not a toll-
free number).
1
The term “counties” in this notice includes boroughs, census areas, counties, islands, municipalities, or parishes.
Bulletin No. 2019–42 935 October 15, 2019

October 15, 2019 936 Bulletin No. 2019–42
APPENDIX
Alabama
Counties of Barbour, Bibb, Chilton, Cof-
fee, Covington, Dale, Geneva, Henry,
Houston, Jefferson, Shelby, and Tuscalo-
osa.
Alaska
Municipality of Anchorage. Boroughs
of Kenai Peninsula, Ketchikan Gate-
way, Kodiak Island, Lake and Peninsu-
la, Matanuska-Susitna. Census Areas of
Prince of Wales-Outer Ketchikan, Skag-
way-Hoonah-Angoon, Valdez-Cordova,
Wrangell-Petersburg, and Yukon-Koyu-
kuk.
Arizona
Counties of Apache, Cochise, Coconino,
Gila, Graham, Greenlee, La Paz, Marico-
pa, Mohave, Navajo, Pima, Pinal, Santa
Cruz, Yavapai, and Yuma.
Arkansas
Counties of Columbia, Lafayette, and
Union.
California
Counties of Del Norte, Humboldt, Impe-
rial, Los Angeles, Modoc, Orange, River-
side, San Bernardino, San Diego, San Luis
Obispo, Santa Barbara, Siskiyou, Trinity,
and Ventura.
Colorado
Counties of Alamosa, Archuleta, Baca,
Bent, Boulder, Chaffee, Clear Creek,
Conejos, Costilla, Crowley, Custer, Delta,
Dolores, Eagle, Elbert, El Paso, Fremont,
Garfield, Gilpin, Grand, Gunnison, Hin-
sdale, Huerfano, Jackson, Kiowa, Lake,
La Plata, Larimer, Las Animas, Lincoln,
Mesa, Mineral, Moffat, Montezuma, Mon-
trose, Otero, Ouray, Park, Pitkin, Prowers,
Pueblo, Rio Blanco, Rio Grande, Routt,
Saguache, San Juan, San Miguel, and
Summit.
Florida
Counties of Brevard, Holmes, Indian
River, Jackson, Martin, Okaloosa, Palm
Beach, Saint Lucie, and Walton.
Georgia
Counties of Atkinson, Bacon, Ben Hill,
Berrien, Brantley, Bryan, Bulloch, Charl-
ton, Chatham, Clay, Clinch, Coffee, Cook,
Early, Effingham, Irwin, Jeff Davis, Lani-
er, Pierce, Screven, and Ware.
Hawaii
Counties of Hawaii, Honolulu, Kauai, and
Maui.
Idaho
Counties of Bannock, Benewah, Bon-
ner, Boundary, Canyon, Cassia, Franklin,
Kootenai, Oneida, Owyhee, Payette, Pow-
er, Shoshone, Twin Falls, and Washington.
Illinois
Counties of Hancock, Henderson, Mercer,
Rock Island, and Warren.
Iowa
Counties of Appanoose, Clarke, Davis,
Decatur, Des Moines, Henry, Jefferson,
Lee, Louisa, Lucas, Mahaska, Marion,
Monroe, Ringgold, Van Buren, Wapello,
and Wayne.
Kansas
Counties of Anderson, Atchison, Brown,
Chase, Coffey, Dickinson, Douglas,
Franklin, Geary, Greenwood, Harvey,
Jackson, Jefferson, Johnson, Leaven-
worth, Linn, Lyon, McPherson, Marion,
Marshall, Miami, Morris, Nemaha, Osage,
Pottawatomie, Riley, Saline, Shawnee,
Wabaunsee, and Wyandotte.
Louisiana
Parishes of Bienville, Bossier, Caddo,
Claiborne, De Soto, Jackson, Lincoln,
Natchitoches, Red River, Union, Webster,
and Winn.
Maine
Counties of Cumberland, Hancock, Knox,
Lincoln, Sagadahoc, and Waldo.
Michigan
Counties of Antrim, Charlevoix, Cheboy-
gan, Crawford, Emmet, Kalkaska, Mack-
inac, Montmorency, Oscoda, Otsego, and
Presque Isle.
Minnesota
County of Marshall.
Missouri
Counties of Adair, Andrew, Audrain,
Barry, Barton, Benton, Boone, Buchan-
an, Caldwell, Callaway, Carroll, Cass,
Cedar, Chariton, Christian, Clark, Clay,
Clinton, Cole, Cooper, Dade, Dallas, Da-
viess, DeKalb, Douglas, Gentry, Greene,
Grundy, Harrison, Hickory, Holt, Howard,
Jackson, Jasper, Johnson, Knox, Laclede,
Lafayette, Lawrence, Lewis, Linn, Liv-
ingston, McDonald, Macon, Maries, Mer-
cer, Moniteau, Monroe, Morgan, Newton,
Nodaway, Osage, Pettis, Phelps, Platte,
Polk, Pulaski, Putnam, Randolph, Ray,
Saint Clair, Saline, Schuyler, Scotland,
Stone, Sullivan, Taney, Webster, Worth,
and Wright.
Montana
Counties of Blaine, Flathead, Lincoln,
Mineral, Phillips, Sanders, and Valley.
Nevada
Counties of Clark, Elko, Humboldt, Wash-
oe, and White Pine.
New Mexico
Counties of Bernalillo, Catron, Chaves,
Cibola, Colfax, Curry, DeBaca, Eddy,
Grant, Guadalupe, Harding, Lea, Lincoln,
Los Alamos, McKinley, Mora, Otero,
Quay, Rio Arriba, Roosevelt, Sandoval,
San Juan, San Miguel, Santa Fe, Sierra,
Socorro, Taos, Torrance, Union, and Va-
lencia.

Bulletin No. 2019–42 937 October 15, 2019
New York
Counties of Clinton, Essex, Franklin,
Hamilton, and Warren.
North Dakota
Counties of Benson, Bottineau, Burke,
Cavalier, Divide, Eddy, Foster, Grand
Forks, Hettinger, McHenry, Mountrail,
Nelson, Pembina, Pierce, Ramsey, Ren-
ville, Rolette, Sheridan, Stark, Towner,
Walsh, Ward, and Wells.
Oklahoma
Counties of Beckham, Blaine, Caddo, Ca-
nadian, Carter, Cimarron, Comanche, Cot-
ton, Custer, Ellis, Garvin, Grady, Greer,
Harmon, Jackson, Jefferson, Kay, Kiowa,
Love, McClain, Noble, Nowata, Osage,
Pawnee, Roger Mills, Rogers, Stephens,
Tillman, Tulsa, Washington, and Washita.
Oregon
Counties of Baker, Benton, Clackamas,
Clatsop, Columbia, Coos, Crook, Cur-
ry, Deschutes, Douglas, Gilliam, Grant,
Harney, Hood River, Jackson, Jefferson,
Josephine, Klamath, Lake, Lane, Lincoln,
Linn, Malheur, Marion, Morrow, Mult-
nomah, Polk, Sherman, Tillamook, Uma-
tilla, Union, Wasco, Washington, Wheel-
er, and Yamhill.
South Carolina
Counties of Allendale, Barnwell, Beau-
fort, Berkeley, Charleston, Colleton,
Dorchester, Hampton, and Jasper.
South Dakota
Counties of Brown, Edmunds, Faulk,
Haakon, McPherson, Spink, and Ziebach.
Texas
Counties of Anderson, Aransas, Archer,
Armstrong, Atascosa, Baylor, Bee, Bell,
Bexar, Blanco, Borden, Bosque, Bow-
ie, Brazos, Briscoe, Brooks, Brown,
Burleson, Burnet, Caldwell, Callahan,
Camp, Carson, Cass, Castro, Cherokee,
Childress, Clay, Coke, Coleman, Colling-
sworth, Comal, Comanche, Concho, Co-
ryell, Cottle, Crosby, Culberson, Dallas,
Dawson, Deaf Smith, Delta, Denton,
Dickens, Dimmit, Donley, Duval, East-
land, Edwards, Ellis, Erath, Falls, Fisher,
Floyd, Foard, Franklin, Freestone, Frio,
Gaines, Garza, Gillespie, Glasscock,
Gonzales, Gray, Gregg, Guadalupe,
Hale, Hall, Hamilton, Hardeman, Harri-
son, Haskell, Hays, Hill, Hockley, Hood,
Hopkins, Houston, Howard, Hudspeth,
Jack, Jeff Davis, Jim Hogg, Jim Wells,
Johnson, Jones, Kendall, Kent, Kerr,
Kimble, King, Kinney, Kleberg, Knox,
Lamar, Lamb, Lampasas, La Salle, Leon,
Limestone, Live Oak, Llano, Lubbock,
Lynn, McCulloch, McLennan, McMul-
len, Madison, Marion, Martin, Mason,
Maverick, Medina, Menard, Midland,
Milam, Mills, Mitchell, Montague,
Morris, Motley, Navarro, Nolan, Nuec-
es, Oldham, Palo Pinto, Panola, Parker,
Potter, Presidio, Randall, Reagan, Real,
Red River, Refugio, Robertson, Runnels,
Rusk, San Patricio, San Saba, Schleicher,
Scurry, Shackelford, Smith, Somervell,
Starr, Stephens, Sterling, Stonewall, Sut-
ton, Swisher, Tarrant, Taylor, Terrell, Ter-
ry, Throckmorton, Titus, Travis, Upshur,
Upton, Uvalde, Val Verde, Van Zandt,
Webb, Wheeler, Wichita, Wilbarger, Wil-
liamson, Wilson, Wise, Wood, Young,
Zapata, and Zavala.
Utah
Counties of Beaver, Box Elder, Cache,
Carbon, Daggett, Davis, Duchesne, Em-
ery, Garfield, Grand, Iron, Juab, Kane,
Millard, Morgan, Piute, Rich, Salt Lake,
San Juan, Sanpete, Sevier, Summit,
Tooele, Uintah, Utah, Wasatch, Washing-
ton, Wayne, and Weber.
Vermont
Counties of Addison, Chittenden, Frank-
lin, Lamoille, Orleans, and Washington.
Washington
Counties of Clallam, Clark, Cowlitz,
Grays Harbor, Jefferson, King, Kitsap,
Klickitat, Lewis, Mason, Pacific, Pend
Oreille, Pierce, Skagit, Skamania, Sno-
homish, Stevens, Thurston, Wahkiakum,
and Whatcom.
Wyoming
Counties of Carbon and Sweetwater.
Guam
Island of Guam.
Commonwealth of the Northern Mariana
Islands
Islands of Rota and Saipan.
Commonwealth of Puerto Rico
Municipalities of Aibonito, Barranquitas,
Cabo Rojo, Cayey, Cidra, Coamo, Comer-
io, Guanica, Guayama, Guayanilla, Jua-
na Diaz, Lajas, Penuelas, Ponce, Sabana
Grande, Salinas, Santa Isabel, Villalba,
and Yauco.
United States Virgin Islands
Islands of Saint Croix and Saint Thomas.
2019-2020 Special Per
Diem Rates
Notice 2019-55
SECTION 1. PURPOSE
This annual notice provides the 2019-
2020 special per diem rates for taxpayers
to use in substantiating the amount of or-
dinary and necessary business expenses
incurred while traveling away from home,
specifically (1) the special transportation
industry meal and incidental expenses
(M&IE) rates, (2) the rate for the inciden-
tal expenses only deduction, and (3) the
rates and list of high-cost localities for
purposes of the high-low substantiation
method.
SECTION 2. BACKGROUND
Rev. Proc. 2011-47, 2011-42 I.R.B.
520 (or successor), provides rules for us-
ing a per diem rate to substantiate, under §
274(d) of the Internal Revenue Code and
§ 1.274-5 of the Income Tax Regulations,
the amount of ordinary and necessary

October 15, 2019 938 Bulletin No. 2019–42
business expenses paid or incurred while
traveling away from home. Taxpayers us-
ing the rates and list of high-cost localities
provided in this notice must comply with
Rev. Proc. 2011-47 (or successor). Notice
2018-77, 2018-42 I.R.B. 601, provides the
rates and list of high-cost localities for the
period October 1, 2018, to September 30,
2019.
Section 3.02(3) of Rev. Proc. 2011-47
(or successor) provides that the term “in-
cidental expenses” has the same meaning
as in the Federal Travel Regulations, 41
C.F.R. 300-3.1, and that future changes
to the definition of incidental expenses
in the Federal Travel Regulations would
be announced in the annual per diem no-
tice. Subsequent to the publication of Rev.
Proc. 2011-47, the General Services Ad-
ministration published final regulations
revising the definition of incidental ex-
penses under the Federal Travel Regula-
tions to include only fees and tips given
to porters, baggage carriers, hotel staff,
and staff on ships. Transportation between
places of lodging or business and places
where meals are taken, and the mailing
cost of filing travel vouchers and paying
employer-sponsored charge card billings,
are no longer included in incidental ex-
penses. Accordingly, taxpayers using the
per diem rates may separately deduct, if
permitted, or be reimbursed for transpor-
tation and mailing expenses.
SECTION 3. SPECIAL M&IE
RATES FOR TRANSPORTATION
INDUSTRY
The special M&IE rates for taxpayers
in the transportation industry are $66 for
any locality of travel in the continental
United States (CONUS) and $71 for any
locality of travel outside the continental
United States (OCONUS). See section
4.04 of Rev. Proc. 2011-47 (or successor).
SECTION 4. RATE FOR
INCIDENTAL EXPENSES ONLY
DEDUCTION
The rate for any CONUS or OCONUS
locality of travel for the incidental ex-
penses only deduction is $5 per day. See
section 4.05 of Rev. Proc. 2011-47 (or
successor).
SECTION 5. HIGH-LOW
SUBSTANTIATION METHOD
1. Annual high-low rates. For purpos-
es of the high-low substantiation method,
the per diem rates in lieu of the rates de-
scribed in Notice 2018-77 (the per diem
substantiation method) are $297 for trav-
el to any high-cost locality and $200 for
travel to any other locality within CO-
NUS. The amount of the $297 high rate
and $200 low rate that is treated as paid
for meals for purposes of § 274(n) is $71
for travel to any high-cost locality and $60
for travel to any other locality within CO-
NUS. See section 5.02 of Rev. Proc. 2011-
47 (or successor). The per diem rates in
lieu of the rates described in Notice 2018-
77 (the meal and incidental expenses only
substantiation method) are $71 for travel
to any high-cost locality and $60 for travel
to any other locality within CONUS.
2. High-cost localities. The following
localities have a federal per diem rate of
$248 or more, and are high-cost localities
for all of the calendar year or the portion
of the calendar year specified in parenthe-
ses under the key city name.
Key city County or other defined location
Arizona
Sedona City Limits of Sedona
California
Mill Valley/San Rafael/Novato Marin
(October 1-October 31 and
June 1-September 30)
Monterey Monterey
(July 1-August 31)
Napa Napa
(October 1-November 30 and
April 1-September 30)
Oakland Alameda
San Francisco San Francisco
San Mateo/Foster City/Belmont San Mateo
Santa Barbara Santa Barbara
(July 1-August 31)
Santa Monica City limits of Santa Monica
Sunnyvale/Palo Alto/San Jose Santa Clara
Colorado
Aspen Pitkin
(October 1-March 31 and
June 1-September 30)

Bulletin No. 2019–42 939 October 15, 2019
Crested Butte/Gunnison Gunnison
(December 1-March 31)
Denver/Aurora Denver, Adams, Arapahoe,
(October 1-October 31 and Jefferson
and April 1-September 30)
Grand Lake Grand
(December 1-March 31)
Silverthorne/Breckenridge Summit
(December 1-March 31)
Telluride San Miguel
Vail Eagle
Delaware
Lewes Sussex
(July 1-August 31)
District of Columbia
Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the
counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and
Prince George’s in Maryland) (See also Maryland and Virginia)
(October 1-June 30
and September 1-September 30)
Florida
Boca Raton/Delray Beach/Jupiter Palm Beach and Hendry
(December 1-April 30)
Fort Lauderdale Broward
(January 1-April 30)
Fort Meyers Lee
(February 1-March 31)
Fort Walton Beach/De Funiak Springs Okaloosa and Walton
(June 1-July 31)
Key West Monroe
(October 1-July 31)
Miami Miami-Dade
(December 1-March 31)
Naples Collier
(February 1-April 30)
Vero Beach Indian River
(December 1-April 30)
Georgia
Jekyll Island/Brunswick Glynn
(June 1-July 31)
Illinois
Chicago Cook and Lake
(October 1-November 30 and
April 1-September 30)
Maine
Bar Harbor/Rockport Hancock and Knox
(July 1-August 31)
Maryland
Ocean City Worcester
(July 1-August 31)

October 15, 2019 940 Bulletin No. 2019–42
Washington, DC Metro Area Montgomery and Prince George’s
(October 1-June 30
and September 1-September 30)
Massachusetts
Boston/Cambridge Suffolk, City of Cambridge
(October 1-November 30 and
March 1-September 30)
Falmouth City limits of Falmouth
(July 1-August 31)
Hyannis Barnstable less the city of
(July 1-August 31) Falmouth
Martha’s Vineyard Dukes
(June 1-September 30)
Nantucket Nantucket
(June 1-September 30)

Michigan
Petoskey Emmet
(July 1-August 31)
Traverse City Grand Traverse
(July 1-August 31)
Montana
Big Sky/West Yellowstone/Gardiner Gallatin and Park
(June 1-September 30)
New Mexico
Carlsbad Eddy
New York
Lake Placid Essex
(July 1-August 31)
New York City Bronx, Kings, New York, Queens,
(October 1-December 31 and and Richmond
March 1-September 30)

Oregon
Portland Multnomah
(October 1-October 31 and
June 1-September 30)
Seaside Clatsop
(July 1-August 31)
Pennsylvania
Hershey Hershey
(June 1-August 31)
Philadelphia Philadelphia
(October 1-November 30 and
September 1-September 30)

Rhode Island
Jamestown/Middletown/Newport Newport
(June 1-August 31)

Bulletin No. 2019–42 941 October 15, 2019
South Carolina
Charleston Charleston, Berkeley, and
(October 1-October 31 and Dorchester
March 1-September 30)
Tennessee
Nashville Davidson
Texas
Midland/Odessa Midland, Andrews, Ector, and Martin
Pecos Reeves
Utah
Park City Summit
(December 1-March 31)
Virginia
Wallops Island Accomack
(July 1-August 31)
Washington, DC Metro Area Cities of Alexandria, Fairfax, and
(October 1-June 30 Falls Church; Counties of
and September 1-September 30) Arlington and Fairfax
Washington
Seattle King
Vancouver Clark, Cowlitz, and Skamania
(October 1-October 31 and
June 1-September 30)
Wyoming
Cody Park
(June 1-September 30)
Jackson/Pinedale Teton and Sublette
(June 1-September 30)
3. Changes in high-cost localities. The
list of high-cost localities in this notice
differs from the list of high-cost localities
in section 5 of Notice 2018-77.
a. The following localities have been
added to the list of high-cost locali-
ties: Mill Valley/San Rafael/Novato,
California; Crested Butte/Gunnison,
Colorado; Petoskey, Michigan; Big
Sky/West Yellowstone/Gardiner,
Montana; Carlsbad, New Mexico;
Nashville, Tennessee; Midland/Odes-
sa, Texas.
b. The following localities have changed
the portion of the year in which they
are high-cost localities: Napa, Cal-
ifornia; Santa Barbara, California;
Denver, Colorado; Vail, Colorado;
Washington D.C., District of Colum-
bia; Key West, Florida; Jekyll Island/
Brunswick, Georgia; New York City,
New York; Portland, Oregon; Phila-
delphia, Pennsylvania; Pecos, Texas;
Vancouver, Washington; Jackson/Pi-
nedale, Wyoming.
c. The following localities have been
removed from the list of high-cost
localities: Los Angeles, California;
San Diego, California; Duluth, Min-
nesota; Moab, Utah; Virginia Beach,
Virginia.
SECTION 6. EFFECTIVE DATE
This notice is effective for per diem al-
lowances for lodging, meal and incidental
expenses, or for meal and incidental ex-
penses only, that are paid to any employ-
ee on or after October 1, 2019, for trav-
el away from home on or after October
1, 2019. For purposes of computing the
amount allowable as a deduction for trav-
el away from home, this notice is effective
for meal and incidental expenses or for
incidental expenses only paid or incurred
on or after October 1, 2019. See sections
4.06 and 5.04 of Rev. Proc. 2011-47 (or
successor) for transition rules for the last
3 months of calendar year 2019.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
Notice 2018-77 is superseded.
DRAFTING INFORMATION
The principal author of this notice
is Maxine Woo-Garcia of the Office of
Associate Chief Counsel (Income Tax

October 15, 2019 942 Bulletin No. 2019–42
& Accounting). For further information
regarding this notice contact Maxine
Woo-Garcia at (202) 317-7005 (not a toll-
free number).
26 CFR 1.199A-1: Trade or Business
(Also: § 199A)
Rev. Proc. 2019-38
SECTION 1. PURPOSE
This revenue procedure provides a
safe harbor under which a rental real es-
tate enterprise will be treated as a trade or
business for purposes of section 199A of
the Internal Revenue Code (Code) and §§
1.199A-1 through 1.199A-6 of the Income
Tax Regulations (26 CFR Part I). The safe
harbor provided by this revenue proce-
dure applies solely for purposes of section
199A. If an enterprise fails to satisfy the
requirements of this safe harbor, it may be
treated as a trade or business for purposes
of section 199A if the enterprise otherwise
meets the definition of trade or business in
§ 1.199A-1(b)(14).
SECTION 2. BACKGROUND
.01 In general. Section 199A was en-
acted on December 22, 2017, as part of
the Tax Cuts and Jobs Act, Pub. L. 115-97,
and was amended on March 23, 2018, ret-
roactively to January 1, 2018, by the Con-
solidated Appropriations Act, 2018, Pub.
L. 115-141. Congress enacted section
199A to provide a deduction to non-cor-
porate taxpayers of up to 20 percent of the
taxpayer’s qualified business income from
each of the taxpayer’s qualified trades
or businesses, including those operated
through a partnership, S corporation, or
sole proprietorship, as well as a deduction
of up to 20 percent of aggregate real estate
investment trust dividends and qualified
publicly traded partnership income.
.02 Trade or business. Section 199A(d)
defines a qualified trade or business as
any trade or business other than a speci-
fied service trade or business (SSTB) or
a trade or business of performing services
as an employee. Section 1.199A-1(b)(14)
defines trade or business for purposes of
section 199A as a trade or business under
section 162 other than the trade or busi-
ness of performing services as an employ-
ee. In addition, § 1.199A-1(b)(14) pro-
vides that rental or licensing of tangible
or intangible property (rental activity) that
does not rise to the level of a section 162
trade or business is nevertheless treated as
a trade or business for purposes of section
199A, if the property is rented or licensed
to a trade or business conducted by the in-
dividual or a relevant passthrough entity
(RPE) which is commonly controlled un-
der § 1.199A-4. Sections 1.199A-5(b) and
1.199A-5(d) define an SSTB and the trade
or business of performing services as an
employee, respectively.
.03 Notice 2019-07. The Treasury
Department and the IRS are aware that
whether an interest in rental real estate ris-
es to the level of a trade or business for
purposes of section 199A is the subject of
uncertainty for some taxpayers. To help
mitigate this uncertainty, a proposed ver-
sion of a revenue procedure containing a
safe harbor for treating a rental real estate
enterprise as a trade or business solely for
purposes of section 199A was released
for public comment in Notice 2019-07,
2019-09 IRB 740. This revenue procedure
is issued following consideration of all
public comments received by the IRS and
the Treasury Department and sets forth the
safe harbor and the procedural require-
ments for using it.
SECTION 3. RULES OF
APPLICATION
.01 In general. This safe harbor is
available to taxpayers who seek to claim
the deduction under section 199A with re-
spect to a rental real estate enterprise as
defined in section 3.02. If the safe harbor
requirements are met, the rental real estate
enterprise will be treated as a single trade
or business as defined in section 199A(d)
for purposes of applying the regulations
under section 199A, including the applica-
tion of the aggregation rules in § 1.199A-
4. RPEs, as defined in § 1.199A-1(b)(10),
may also use this safe harbor. In order to
rely upon the safe harbor, taxpayers and
RPEs must satisfy all of the requirements
of this revenue procedure. Failure to sat-
isfy the requirements of this safe harbor
does not preclude a taxpayer or the Ser-
vice from otherwise establishing that an
interest in rental real estate is a trade or
business for purposes of section 199A.
.02 Rental real estate enterprise. Sole-
ly for purposes of this safe harbor, a rental
real estate enterprise is defined as an inter-
est in real property held for the production
of rents and may consist of an interest in
a single property or interests in multiple
properties. The taxpayer or RPE relying
on this revenue procedure must hold each
interest directly or through an entity disre-
garded as an entity separate from its own-
er under any provision of the Code.
Except for those property interests de-
scribed in paragraph .05 of this section,
taxpayers and RPEs may either treat each
interest in similar property held for the
production of rents as a separate rental
real estate enterprise or treat interests in
all similar properties held for the produc-
tion of rents as a single rental real estate
enterprise. For purposes of applying this
revenue procedure, properties held for
the production of rents are similar if they
are part of the same rental real estate cat-
egory. The two types of rental real estate
categories for the purpose of combining
properties into a single rental real estate
enterprise are residential and commercial.
Thus, commercial real estate held for the
production of rents may only be part of
the same enterprise with other commercial
real estate, and residential properties may
only be part of the same enterprise with
other residential properties.
Once a taxpayer or RPE treats interests
in similar commercial properties or simi-
lar residential properties as a single rental
real estate enterprise under the safe har-
bor, the taxpayer or RPE must continue
to treat interests in all similar properties,
including newly acquired properties, as a
single rental real estate enterprise when
the taxpayer or RPE continues to rely on
the safe harbor. However, a taxpayer or
RPE that chooses to treat its interest in
each residential or commercial property
as a separate rental real estate enterprise
may choose to treat its interests in all sim-
ilar commercial or all similar residential
properties as a single rental real estate en-
terprise in a future year.
An interest in mixed-use property may
be treated as a single rental real estate en-
terprise or may be bifurcated into separate
residential and commercial interests. For
purposes of this revenue procedure, mixed-

Bulletin No. 2019–42 943 October 15, 2019
use property is defined as a single building
that combines residential and commercial
units. An interest in mixed-use property, if
treated as a single rental real estate enter-
prise, may not be treated as part of the same
enterprise as other residential, commercial,
or mixed-use property.
Each rental real estate enterprise that
satisfies the requirements of this safe
harbor is treated as a separate trade or
business for purposes of applying section
199A and the regulations thereunder.
.03 Safe harbor. The determination to
use this safe harbor must be made annu-
ally. Solely for the purposes of section
199A, each rental real estate enterprise
will be treated as a single trade or business
if the following requirements are satisfied
during the taxable year with respect to the
rental real estate enterprise:
(A) Separate books and records are main-
tained to reflect income and expenses
for each rental real estate enterprise.
If a rental real estate enterprise con-
tains more than one property, this re-
quirement may be satisfied if income
and expense information statements
for each property are maintained and
then consolidated;
(B) For rental real estate enterprises that
have been in existence less than four
years, 250 or more hours of rental
services are performed (as described
in this revenue procedure) per year
with respect to the rental real estate
enterprise. For rental real estate en-
terprises that have been in existence
for at least four years, in any three
of the five consecutive taxable years
that end with the taxable year, 250 or
more hours of rental services are per-
formed (as described in this revenue
procedure) per year with respect to
the rental real estate enterprise;
(C) The taxpayer maintains contempora-
neous records, including time reports,
logs, or similar documents, regarding
the following: (i) hours of all ser-
vices performed; (ii) description of
all services performed; (iii) dates on
which such services were performed;
and (iv) who performed the services.
If services with respect to the rental
real estate enterprise are performed
by employees or independent con-
tractors, the taxpayer may provide a
description of the rental services per-
formed by such employee or indepen-
dent contractor, the amount of time
such employee or independent con-
tractor generally spends performing
such services for the enterprise, and
time, wage, or payment records for
such employee or independent con-
tractor. Such records are to be made
available for inspection at the request
of the IRS; and
(D) The taxpayer or RPE attaches a state-
ment to a timely filed original return
(or an amended return for the 2018
taxable year only) for each taxable
year in which the taxpayer or RPE
relies on the safe harbor. A tax payer
or RPE with more than one rental real
estate enterprise relying on this safe
harbor may submit a single state-
ment but the statement must list the
required information separately for
each rental real estate enterprise. The
statement must include the following
information:
(1) A description (including the ad-
dress and rental category) of all
rental real estate properties that
are included in each rental real
estate enterprise;
(2) A description (including the ad-
dress and rental category) of
rental real estate properties ac-
quired and disposed of during the
taxable year; and
(3) A representation that the require-
ments of this revenue procedure
have been satisfied.
.04 Rental services. Rental services for
purpose of this revenue procedure include,
but are not limited to: (i) advertising to
rent or lease the real estate; (ii) negotiat-
ing and executing leases; (iii) verifying in-
formation contained in prospective tenant
applications; (iv) collection of rent; (v)
daily operation, maintenance, and repair
of the property, including the purchase of
materials and supplies; (vi) management
of the real estate; and (vii) supervision of
employees and independent contractors.
Rental services may be performed by
owners, including owners of an RPE, or
by employees, agents, and/or independent
contractors of the owners. The term rental
services does not include financial or in-
vestment management activities, such as
arranging financing; procuring property;
studying and reviewing financial state-
ments or reports on operations; improving
property under § 1.263(a)-3(d); or hours
spent traveling to and from the real estate.
.05 Certain rental real estate arrange-
ments excluded. The following types of
property may not be included in a rental
real estate enterprise and are therefore not
eligible for the safe harbor:
(A) Real estate used by the taxpayer (in-
cluding an owner or beneficiary of
an RPE) as a residence under section
280A(d).
(B) Real estate rented or leased under a
triple net lease. For purposes of this
revenue procedure, a triple net lease
includes a lease agreement that re-
quires the tenant or lessee to pay tax-
es, fees, and insurance, and to pay for
maintenance activities for a property
in addition to rent and utilities.
(C) Real estate rented to a trade or busi-
ness conducted by a taxpayer or an
RPE which is commonly controlled
under § 1.199A-4(b)(1)(i).
(D) The entire rental real estate interest if
any portion of the interest is treated
as an SSTB under § 1.199A-5(c)(2)
(which provides special rules where
property or services are provided to
an SSTB).
SECTION 4. EFFECTIVE DATE
This revenue procedure applies to
taxable years ending after December 31,
2017. Alternatively, taxpayers and RPEs
may rely on the safe harbor set forth in
Notice 2019-07, 2019-09 IRB 740, for
the 2018 taxable year. The contempora-
neous records requirement will not ap-
ply to taxable years beginning prior to
January 1, 2020. However, taxpayers are
reminded that they bear the burden of
showing the right to any claimed deduc-
tions in all taxable years. INDOPCO, Inc.
v. Comm’r, 503 U.S. 79, 84; 112 S.Ct.
1039, 1043) (1992); Interstate Transit
Lines v. Comm’r, 319 U.S. 590, 593, 63
S.Ct. 1279, 1281 (1943). See also I.R.C.
§ 6001; Treas. Reg. § 1.6001-1(a) and (e).
SECTION 5. PAPERWORK
REDUCTION ACT
.01 Collections of Information – Forms
1040, 1040-NR, 1040-SR, 1041, 1065,
and 1120S.

October 15, 2019 944 Bulletin No. 2019–42
The collections of information in this
revenue procedure are in sections 3.03(C)
and 3.03(D). The information collection
requirement pursuant to section 3.03(C) is
discussed further below. The IRS intends
that the collections of information pursu-
ant to section 3.03(D) will be conducted
by way of attachment to the following:
• Form 1040, U.S. Individual Income
Tax Return;
• Form 1040-NR, U.S. Nonresident
Alien Income Tax Return;
• Form 1040-SR, U.S. Tax Return for
Seniors;
• Form 1041, U.S. Income Tax Return
for Trusts and Estates;
• Form 1065, U.S. Return of Partner-
ship Income; or
• Form 1120S, U.S. Income Tax Return
for an S Corporation
For purposes of the Paperwork Reduc-
tion Act, the reporting burden associated
with the collections of information with
respect to section 3.03(D) will be reflect-
ed in the IRS Forms 14029 Paperwork
Reduction Act Submission, associated
with the Forms 1040 and 1040-NR (OMB
control number 1545-0074), Form 1041
(OMB control number 1545-0092), and
Forms 1065 and 1120S (OMB control
numbers 1545-0123).
.02 Collection of Information – Section
3.03(C)
In contrast to the collections of in-
formation pursuant to the provisions of
section 3.03(D) (as discussed above),
the IRS intends that the information col-
lection requirements pursuant to section
3.03(C) will be satisfied by the taxpayer
maintaining contemporaneous records
that are adequate to verify the number of
service hours performed with respect to
a rental real estate enterprise, including
(i) hours of all services performed; (ii)
description of all services performed;
(iii) dates on which such services were
performed; and (iv) who performed the
services.
The collection of information contained
in section 3.03(C) will be submitted to the
Office of Management and Budget for re-
view in accordance with the Paperwork Re-
duction Act of 1994 (44 U.S.C. 3507(d)).
Comments on the collection of information
should be sent to the Office of Manage-
ment and Budget, Attn: Desk Officer for
the Department of the Treasury, Office of
Information and Regulatory Affairs, Wash-
ington, DC 20503, with copies to the In-
ternal Revenue Service, Attn: IRS Reports
Clearance Officer, SE:W:CAR:MP:T:T:SP,
Washington, DC 20224. Comments on the
collection of information should be re-
ceived by December 16, 2019.
Comments are specifically requested
concerning:
Whether the proposed collection of
information is necessary for the proper
performance of the duties of the IRS, in-
cluding whether the information will have
practical utility;
The accuracy of the estimated burden
associated with the proposed collection
of information (including underlying as-
sumptions and methodology);
How the quality, utility, and clarity of
the information to be collected may be en-
hanced;
How the burden of complying with
the proposed collection of information
may be minimized, including through the
application of automated collection tech-
niques or other forms of information tech-
nology; and
Estimates of capital or start-up costs and
costs of operation, maintenance, and pur-
chases of services to provide information.
The collection of information in sec-
tion 3.03(C) is mandatory for respondents
that choose to rely on the safe harbor. The
likely respondents are individuals, part-
nerships, S corporations, trusts, and es-
tates that own rental real estate.
The estimated total annual reporting
and/or recordkeeping burden is 5.5 mil-
lion hours.
The estimated annual burden per re-
spondent/recordkeeper varies from 3 to 10
hours, depending on individual circum-
stances, with an estimated average of 5
hours. The estimated number of respon-
dents and/or recordkeepers is 1.1 million.
This estimate is based on an assumption
that only a portion of taxpayers and RPEs
with interests in rental real estate (based
on numbers of Schedule E and Forms
8825 filed) will choose to rely on the safe
harbor.
The estimated annual frequency of re-
sponses (used for reporting requirements
only) is annual.
Using the IRS’s taxpayer compliance
cost estimates, individuals filing Form
1040 Schedule E are estimated to have
a monetization rate of $25.63 per hour.
Passthrough entities filing Form 8825 are
estimated to have a monetization rate of
$40.16 per hour.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-
rial in the administration of any internal
revenue law. Generally, tax returns and tax
return information are confidential, as re-
quired by 26 U.S.C. 6103.
SECTION 6. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Robert D. Alinsky, Vishal
R. Amin, Margaret Burow, and Sonia K.
Kothari of the Office of the Associate
Chief Counsel (Passthroughs & Special
Industries). However, other personnel
from the Treasury Department and the
IRS participated in its development. For
further information regarding this reve-
nue procedure contact Robert D. Alinsky
or Margaret Burow at (202) 317-5279 or
Vishal R. Amin or Sonia K. Kothari at
(202) 317-6850 (not a toll-free number).

Rev. Proc. 2019-39
TABLE OF CONTENTS
PART I – OVERVIEW AND DEFINITIONS
SECTION 1. PURPOSE .................................................................................946
SECTION 2. BACKGROUND ............................................................................947
SECTION 3. ORGANIZATION OF REVENUE PROCEDURE .................................................948
.01 Guidance for § 403(b) Individually Designed Plans
.02 Guidance for § 403(b) Pre-approved Plans
SECTION 4. DEFINITIONS .............................................................................949
PART II – SECTION 403(b) INDIVIDUALLY DESIGNED PLANS
SECTION 5. RECURRING REMEDIAL AMENDMENT PERIODS FOR § 403(b) INDIVIDUALLY
DESIGNED PLANS .........................................................................950
.01 In general
.02 Beginning of Remedial Amendment Period
.03 End of Remedial Amendment Period
(1) Section 403(b) plan that is not a governmental plan
(a) New plan
(b) Amendment to existing plan
(c) Change in § 403(b) Requirements
(2) Section 403(b) plan that is a governmental plan
(a) New Plan
(b) Amendment to existing plan
(c) Change in § 403(b) Requirements
.04 Terminating plan
.05 Circumstances in which a Form Defect may not be corrected retroactively under Remedial
Amendment Period
SECTION 6. PLAN AMENDMENT DEADLINES FOR § 403(b) INDIVIDUALLY DESIGNED PLANS ................952
.01 Plan amendment deadline for Form Defects
.02 Plan amendment deadline for discretionary amendments
(1) Section 403(b) plan that is not a governmental plan
(2) Section 403(b) plan that is a governmental plan
.03 Example illustrating plan amendment deadlines under sections 6.01 and 6.02
SECTION 7. LIMITED EXTENSION OF INITIAL REMEDIAL AMENDMENT PERIOD FOR
§ 403(b) INDIVIDUALLY DESIGNED PLANS ...................................................953
SECTION 8. REQUIRED AMENDMENTS LIST ............................................................953
.01 Inclusion of changes in § 403(b) Requirements
.02 When a change in § 403(b) Requirements will be included on Required Amendments List
SECTION 9. OPERATIONAL COMPLIANCE LIST ..........................................................954
PART III – SECTION 403(b) PRE-APPROVED PLANS
SECTION 10. SECTION 403(b) PRE-APPROVED PLAN CYCLE SYSTEM .......................................954
.01 Establishment of recurring § 403(b) Pre-approved Plan Cycles
.02 First § 403(b) Pre-approved Plan Cycle (Cycle 1)
.03 Second § 403(b) Pre-approved Plan Cycle (Cycle 2)
.04 Future § 403(b) Pre-approved Plan Cycles
SECTION 11. RECURRING REMEDIAL AMENDMENT PERIODS FOR § 403(b) PRE-APPROVED PLANS ...........955
.01 In general
.02 Beginning of Remedial Amendment Period
.03 End of Remedial Amendment Period
.04 Interim amendment requirement for a change in § 403(b) Requirements
(1) In general
(2) Good-faith determination that no interim amendment is required
.05 Terminating plan
Bulletin No. 2019–42 945 October 15, 2019

.06 Circumstances in which a Form Defect may not be corrected retroactively under
Remedial Amendment Period
SECTION 12. PLAN AMENDMENT DEADLINES FOR § 403(b) PRE-APPROVED PLANS .........................956
.01 Plan amendment deadline
(1) Section 403(b) plan that is not a governmental plan
(a) Interim amendments
(b) Discretionary amendments
(2) Section 403(b) plan that is a governmental plan
(a) Interim amendments
(b) Discretionary amendments
.02 Exceptions to section 12.01 plan amendment deadlines
SECTION 13. LIMITED EXTENSION OF INITIAL REMEDIAL AMENDMENT PERIOD FOR CYCLE 1 PLANS .......957
.01 In general
.02 Exception for certain Form Defects first occurring before January 1, 2018
.03 Plan amendment requirement for Form Defect related to a change in § 403(b) Requirements
.04 Plan restatement does not supersede prior amendments to a Cycle 1 plan
SECTION 14. OPERATIONAL COMPLIANCE LIST ..........................................................959
PART IV – EFFECT ON OTHER DOCUMENTS, EFFECTIVE DATE, DRAFTING INFORMATION
SECTION 15. EFFECT ON OTHER DOCUMENTS ...........................................................959
SECTION 16. EFFECTIVE DATE ..........................................................................959
SECTION 17. DRAFTING INFORMATION .................................................................959
PART I.
OVERVIEW AND DEFINITIONS
SECTION 1. PURPOSE
.01 Section 21.02 of Rev. Proc. 2013-22, 2013-18 I.R.B. 985, as modified by Rev. Proc. 2014-
28, 2014-16 I.R.B. 944, and Rev. Proc. 2015-22, 2015-22 I.R.B. 754, and clarified by Rev. Proc.
2017-18, 2017-5 I.R.B. 743,
1
establishes a remedial amendment period that permits an Eligible
Employer to retroactively correct Form Defects in its written § 403(b) plan by timely adopting a
§ 403(b) Pre-approved Plan or by otherwise timely amending its § 403(b) Individually Designed
Plan. Rev. Proc. 2017-18 provides that March 31, 2020, is the last day of this initial remedial
amendment period. In addition, section 16.01 of Rev. Proc. 2013-22 provides that the Internal
Revenue Service (IRS) expects future guidance to require the restatement of § 403(b) Pre-ap-
proved Plans every six years.
.02 This revenue procedure sets forth a system of recurring Remedial Amendment Periods for
correcting Form Defects in § 403(b) Individually Designed Plans and § 403(b) Pre-approved Plans
first occurring after the Initial Remedial Amendment Period (as defined in section 4.03) ends on
March 31, 2020, and provides a limited extension of the Initial Remedial Amendment Period for
certain Form Defects. Further, as contemplated by section 16.01 of Rev. Proc. 2013-22, this reve-
nue procedure establishes a system of § 403(b) Pre-approved Plan Cycles under which a § 403(b)
Pre-approved Plan Sponsor may submit a proposed § 403(b) Pre-approved Plan for review and
approval by the IRS. Once approved, the § 403(b) Pre-approved Plan may be made available
for adoption by Eligible Employers. Finally, this revenue procedure provides deadlines for the
1
For purposes of this revenue procedure, references to Rev. Proc. 2013-22 are to Rev. Proc. 2013-22, as modified by Rev. Proc. 2014-28 and Rev. Proc. 2015-22, and clarified by Rev. Proc.
2017-18.
October 15, 2019 946 Bulletin No. 2019–42

Bulletin No. 2019–42 947 October 15, 2019
adoption of plan amendments for § 403(b) Individually Designed Plans and § 403(b) Pre-approved
Plans.
2
.03 This revenue procedure also announces that the Department of the Treasury (Treasury Depart-
ment) and the IRS intend to issue additional guidance, prior to the date that § 403(b) Pre-approved
Plans may next be submitted for review, relating to the system of recurring Remedial Amendment
Periods and the system of recurring § 403(b) Pre-approved Plan Cycles.
SECTION 2. BACKGROUND
.01 Final regulations under § 403(b) (§§ 1.403(b)-1 through 1.403(b)-11) were published on July
26, 2007 (T.D. 9340, 72 FR 41128). Section 1.403(b)-3(b)(3)(i) generally provides that a con-
tract does not satisfy the requirements of § 1.403(b)-3(a) (regarding exclusion of contributions
from gross income) unless it is maintained pursuant to a plan. For this purpose, a plan is a writ-
ten defined contribution plan, which, in both form and operation, satisfies the requirements of
§§ 1.403(b)-1 through 1.403(b)-11.
3
.02 Rev. Proc. 2013-22 sets forth the procedures for issuing opinion and advisory letters for
§ 403(b) Pre-approved Plans. Under the § 403(b) Pre-approved Plan program established by
Rev. Proc. 2013-22, the IRS began accepting applications for opinion and advisory letters regard-
ing the acceptability under § 403(b) of the form of prototype plans and volume submitter plans,
respectively, on June 28, 2013. Section 16.01 of Rev. Proc. 2013-22 provides that the IRS expects
future guidance to require the restatement of every § 403(b) Pre-approved Plan by the § 403(b)
Pre-approved Plan Sponsor every six years. Upon issuance of a new opinion or advisory letter for
the restated plan, adopting Eligible Employers generally would be required to adopt the restated
plan.
.03 The IRS issued § 403(b) Pre-approved Plan Letters beginning in March 2017. As provided in
the § 403(b) Pre-approved Plan Letters, the IRS considered changes set forth in the final regula-
tions under § 403(b) (§§ 1.403(b)-1 through 1.403(b)-11) that were published on July 26, 2007,
and the applicable requirements of the 2012 Cumulative List of Changes in Plan Qualification
Requirements contained in Notice 2012-76, 2012-62 I.R.B. 775.
.04 Section 21.02 of Rev. Proc. 2013-22 establishes an Initial Remedial Amendment Period to
allow an Eligible Employer to retroactively correct defects in the form of its written § 403(b) plan
by timely adopting a § 403(b) Pre-approved Plan or by otherwise timely amending its § 403(b)
Individually Designed Plan. Section 21.02 of Rev. Proc. 2013-22 defines a defect in the form of
a plan as a provision, or the absence of a required provision, that causes the plan to fail to satisfy
the requirements of § 403(b). Section 21.02 also provides that the first day of the Initial Remedial
Amendment Period is the later of January 1, 2010, or the effective date of the plan.
.05 Section 21.03 of Rev. Proc. 2013-22 provides, in general, that the form of a plan will be treated
as satisfying the requirements of the final regulations under § 403(b) published on July 26, 2007,
as of the first day of the plan’s Initial Remedial Amendment Period if (1) on or before that day, the
Eligible Employer adopts a written plan that is intended to satisfy the requirements of § 403(b),
and (2) on or before the last day of the Initial Remedial Amendment Period, the employer amends
the plan to the extent necessary to correct any Form Defects retroactive to the first day of the Initial
Remedial Amendment Period.
2
This guidance does not address issues under Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”). Thus, for example, for § 403(b) plans covered by Title I of ERISA,
this revenue procedure does not provide relief from the requirements of § 204(g) of Title I of ERISA (decrease of accrued benefits through amendment of plan) for any plan amendments,
including plan amendments adopted as a result of changes in § 403(b) Requirements.
3
The written plan document requirement applies to a § 403(b) plan maintained by a church only if the plan is a retirement income account plan under § 403(b)(9). Section 1.403(b)-3(b)(3)(iii).

October 15, 2019 948 Bulletin No. 2019–42
.06 Section 21.05 of Rev. Proc. 2013-22 provides that the IRS will announce, in subsequent guid-
ance, the date that will be the last day of the Initial Remedial Amendment Period for all Eligible
Employers for purposes of section 21 of Rev. Proc. 2013-22.
.07 Section 3 of Rev. Proc. 2017-18 provides that the last day of the Initial Remedial Amendment
Period, for purposes of section 21 of Rev. Proc. 2013-22, is March 31, 2020. Section 3 of Rev.
Proc. 2017-18 further provides that a plan that does not satisfy the requirements of § 403(b) in
form on any day during the Initial Remedial Amendment Period will be considered to have sat-
isfied those requirements if, on or before March 31, 2020, all provisions of the plan that are nec-
essary to satisfy § 403(b) have been adopted and made effective in form and operation from the
beginning of the Initial Remedial Amendment Period.
.08 Rev. Proc. 2016-37, 2016-29 I.R.B. 136, sets forth, for individually designed and pre-approved
plans qualified under § 401(a), rules relating to remedial amendment periods, a system of remedial
amendment cycles for pre-approved plans, and general plan amendment deadlines. As described
in Rev. Proc. 2016-37, for qualified individually designed plans, the date a remedial amendment
period applicable to changes in qualification requirements ends is set forth in an annual Required
Amendments List published by the Treasury Department and the IRS.
4
To assist qualified plan
sponsors in achieving operational compliance with the qualification requirements, the IRS main-
tains on the IRS Employee Plans website an Operational Compliance List (https://www.irs.gov/
retirement-plans/operational-compliance-list), which sets forth a list of changes in qualification
requirements that are effective during a calendar year.
SECTION 3. ORGANIZATION OF REVENUE PROCEDURE
.01 Guidance for § 403(b) Individually Designed Plans. Section 5 of this revenue procedure es-
tablishes a system of recurring Remedial Amendment Periods for § 403(b) Individually Designed
Plans to allow an Eligible Employer to retroactively correct Form Defects in its written § 403(b)
plan first occurring after March 31, 2020. Section 6 establishes plan amendment deadlines with re-
spect to § 403(b) Individually Designed Plans. Section 7 provides a limited extension of the Initial
Remedial Amendment Period for certain Form Defects in § 403(b) Individually Designed Plans.
Sections 8 and 9 provide that changes in § 403(b) Requirements will appear on the Required
Amendments List and the Operational Compliance List, respectively. The provisions referenced
in this section 3.01 are similar in many respects to the provisions for individually designed quali-
fied plans under § 401(a), which are described in Part II of Rev. Proc. 2016-37.
.02 Guidance for § 403(b) Pre-approved Plans. Section 10 of this revenue procedure establishes
a system of recurring § 403(b) Pre-approved Plan Cycles. Section 11 establishes a system of
recurring Remedial Amendment Periods for § 403(b) Pre-approved Plans to allow an Eligible Em-
ployer to retroactively correct Form Defects in its written § 403(b) plan first occurring after March
31, 2020. Additional rules relating to the recurring § 403(b) Pre-approved Plan Cycles and the
recurring Remedial Amendment Periods in § 403(b) Pre-approved Plans will be provided in future
guidance. Section 12 establishes plan amendment deadlines with respect to § 403(b) Pre-approved
Plans. Section 13 provides a limited extension of the Initial Remedial Amendment Period for
certain Form Defects for § 403(b) Pre-approved Plans. The provisions referenced in this section
3.02 are similar in many respects to the provisions for pre-approved qualified plans under § 401(a),
which are described in Part III of Rev. Proc. 2016-37.
4
For prior Required Amendments Lists, see Notice 2018-91, 2018-50 I.R.B. 985, Notice 2017-72, 2017-52 I.R.B. 601, and Notice 2016-80, 2016-52 I.R.B. 918.

Bulletin No. 2019–42 949 October 15, 2019
SECTION 4. DEFINITIONS
.01 Eligible Employer means an employer described in § 403(b)(1)(A).
.02 Form Defect means:
(1) a provision that causes a plan to fail to satisfy the § 403(b) Requirements;
(2) the absence of a provision that causes a plan to fail to satisfy the § 403(b) Requirements;
(3) a provision that is integral to a § 403(b) Requirement that has been changed (either by statute,
or in regulations or other guidance published in the Internal Revenue Bulletin); or
(4) the absence from a plan of a provision required by a change to the § 403(b) Requirements (ei-
ther by statute, or in regulations or other guidance published in the Internal Revenue Bulletin)
or integral to the change.
.03 Initial Remedial Amendment Period means the period established under section 21 of Rev. Proc.
2013-22 during which an Eligible Employer maintaining a § 403(b) plan may correct Form De-
fects in its plan retroactive to the beginning of that period. The Initial Remedial Amendment Pe-
riod begins on the later of January 1, 2010, or the effective date of the plan and, pursuant to Rev.
Proc. 2017-18, ends on March 31, 2020. The Initial Remedial Amendment Period applies to both
§ 403(b) Individually Designed Plans and § 403(b) Pre-approved Plans.
.04 Remedial Amendment Period means the period during which an Eligible Employer maintain-
ing a § 403(b) plan may correct Form Defects in its plan retroactive to the beginning of the period,
pursuant to section 5 or 11 of this revenue procedure, as applicable.
.05 Section 403(b) Individually Designed Plan means a § 403(b) plan that is not a § 403(b) Pre-ap-
proved Plan.
.06 Section 403(b) Pre-approved Plan means a plan that is either a § 403(b) prototype plan or a §
403(b) volume submitter plan, as described in Rev. Proc. 2013-22.
5
.07 Section 403(b) Pre-approved Plan Cycle means the plan approval period, as described in sec-
tion 10.01, during which a § 403(b) Pre-approved Plan Sponsor submits a proposed § 403(b)
Pre-approved Plan for review and approval by the IRS, and during which the plan, once approved,
is adopted by Eligible Employers.
.08 Section 403(b) Pre-approved Plan Letter means an opinion letter or advisory letter, as de-
scribed in Rev. Proc. 2013-22, issued by the IRS for a § 403(b) Pre-approved Plan.
.09 Section 403(b) Pre-approved Plan Sponsor means a § 403(b) prototype plan sponsor or a §
403(b) volume submitter practitioner, as described in Rev. Proc. 2013-22.
.10 Section 403(b) Requirements means the requirements of § 403(b), including requirements pro-
vided in the Internal Revenue Code (Code), and in regulations and other guidance published in the
Internal Revenue Bulletin.
5
The IRS anticipates combining § 403(b) prototype plans and § 403(b) volume submitter plans in the future (similar to the combination of § 401(a) master and prototype and volume submitter
plans in Rev. Proc. 2017-41, 2017-29 I.R.B. 92).

October 15, 2019 950 Bulletin No. 2019–42
PART II.
SECTION 403(b) INDIVIDUALLY DESIGNED PLANS
SECTION 5. RECURRING REMEDIAL AMENDMENT PERIODS FOR § 403(b) INDIVIDUALLY DESIGNED PLANS
.01 In general. This section 5 establishes a system of recurring Remedial Amendment Periods for
§ 403(b) Individually Designed Plan Form Defects first occurring after March 31, 2020. Under
this recurring Remedial Amendment Period system, a § 403(b) Individually Designed Plan that
does not satisfy the § 403(b) Requirements on any day solely as a result of a Form Defect will be
considered to have satisfied the § 403(b) Requirements on that date if, on or before the last day of
the Remedial Amendment Period with respect to the Form Defect, all provisions of the plan that
are necessary to satisfy all § 403(b) Requirements related to the Form Defect have been adopted
and made effective in form and operation for the whole of that period.
.02 Beginning of Remedial Amendment Period. Unless another time is specified by the Commis-
sioner of the IRS in guidance published in the Internal Revenue Bulletin, the Remedial Amend-
ment Period with respect to a Form Defect first occurring after March 31, 2020, begins:
(1) in the case of a Form Defect with respect to a provision of, or absence of a provision from, a
new plan, the date the plan is put into effect;
(2) in the case of a Form Defect with respect to an amendment to an existing plan (other than a
Form Defect that is related to a change in § 403(b) Requirements, or that is integral to such a
change, as described in paragraph (3) and (4), respectively, of this section 5.02), the date the
plan amendment is adopted or put into effect, whichever is earlier;
(3) in the case of a Form Defect with respect to a provision that fails to satisfy the § 403(b) Re-
quirements by reason of a change in those requirements, the date on which the change effected
by an amendment to the Code or a change in the requirements provided in regulations or other
guidance published in the Internal Revenue Bulletin became effective with respect to the plan;
or
(4) in the case of a Form Defect with respect to a provision that is integral to a § 403(b) Require-
ment that has been changed, the first day on which the plan was operated in accordance with
such provision, as amended.
.03 End of Remedial Amendment Period.
(1) Section 403(b) plan that is not a governmental plan. Except as otherwise provided by statute,
or in regulations or other guidance published in the Internal Revenue Bulletin, the end of the Re-
medial Amendment Period for a § 403(b) Individually Designed Plan that is not a governmental
plan within the meaning of § 414(d) is as follows:
(a) New plan. With respect to a Form Defect described in section 5.02(1) relating to a new plan,
the Remedial Amendment Period ends on the last day of the second calendar year following
the calendar year in which the plan is put into effect.
(b) Amendment to existing plan. With respect to a Form Defect described in section 5.02(2) relat-
ing to an amendment to an existing plan (but not relating to, or integral to, a change in § 403(b)
Requirements), the Remedial Amendment Period ends on the last day of the second calendar
year following the calendar year in which the amendment is adopted or effective, whichever
is later.

Bulletin No. 2019–42 951 October 15, 2019
(c) Change in § 403(b) Requirements. With respect to a Form Defect described in section 5.02(3)
or (4) relating to, or integral to, a change in § 403(b) Requirements, the Remedial Amendment
Period ends on the last day of the second calendar year that begins after the issuance of the
Required Amendments List (described in section 8) in which the change in § 403(b) Require-
ments appears.
(2) Section 403(b) plan that is a governmental plan. Except as otherwise provided by statute, or in
regulations or other guidance published in the Internal Revenue Bulletin, the end of the Remedial
Amendment Period for a § 403(b) Individually Designed Plan that is a governmental plan within
the meaning of § 414(d) is as follows:
(a) New Plan. With respect to a Form Defect described in section 5.02(1) relating to a new plan,
the Remedial Amendment Period ends on the later of:
(i) the last day of the second calendar year following the calendar year in which the plan is
put into effect; or
(ii) 90 days after the close of the third regular legislative session of the legislative body with
the authority to amend the plan that begins after the end of the plan’s initial plan year.
(b) Amendment to existing plan. With respect to a Form Defect described in section 5.02(2)
relating to an amendment to an existing plan (but not relating to, or integral to, a change in §
403(b) Requirements), the Remedial Amendment Period ends on the later of:
(i) the last day of the second calendar year following the calendar year in which the amend-
ment is adopted or effective, whichever is later; or
(ii) 90 days after the close of the third regular legislative session of the legislative body with
the authority to amend the plan that begins after the calendar year in which the amend-
ment is adopted or effective, whichever is later.
(c) Change in § 403(b) Requirements. With respect to a Form Defect described in section 5.02(3)
or (4) relating to, or integral to, a change in § 403(b) Requirements, the Remedial Amendment
Period ends on the later of:
(i) the last day of the second calendar year that begins after the issuance of the Required
Amendments List in which the change in § 403(b) Requirements appears; or
(ii) 90 days after the close of the third regular legislative session of the legislative body with
the authority to amend the plan that begins on or after the date of issuance of the Required
Amendments List in which the change in § 403(b) Requirements appears.
.04 Terminating plan. Notwithstanding section 5.03, the termination of a § 403(b) Individually
Designed Plan ends (and will generally shorten) the Remedial Amendment Period for each Form
Defect of the plan. Accordingly, any retroactive remedial plan amendments or other required plan
amendments for a terminating plan (that is, plan amendments required to be adopted to reflect §
403(b) Requirements that apply as of the date of termination) must be adopted in connection with
the plan termination regardless of whether such requirements are included on a Required Amend-
ments List.
.05 Circumstances in which a Form Defect may not be corrected retroactively under a Remedial
Amendment Period. If it is not possible to amend a plan retroactively so that all provisions of the
plan that are necessary to satisfy § 403(b) Requirements related to the Form Defect are made effec-
tive in operation for the whole Remedial Amendment Period, then the requirements of section 5.01
will not be satisfied even if the Eligible Employer adopts a retroactive plan amendment that, in
form, appears to satisfy those requirements. This revenue procedure also does not permit a plan to

October 15, 2019 952 Bulletin No. 2019–42
be made retroactively effective, for purposes of complying with § 403(b) Requirements, for a tax-
able year prior to the taxable year of the Eligible Employer in which the plan was adopted by the
Eligible Employer. In addition, a § 403(b) plan for which an Eligible Employer corrects a Form
Defect after the expiration of the applicable Remedial Amendment Period will not be considered to
satisfy the requirements of § 403(b). However, an Eligible Employer maintaining a § 403(b) plan
that has a Form Defect that cannot be corrected by an amendment within the applicable Remedial
Amendment Period may be able to correct the Form Defect under the Employee Plans Compliance
Resolution System (EPCRS). See Rev. Proc. 2019-19, 2019-19 I.R.B. 1086, or its successors.
SECTION 6. PLAN AMENDMENT DEADLINE FOR § 403(b) INDIVIDUALLY DESIGNED PLANS
.01 Plan amendment deadline for Form Defects. Except as otherwise provided by statute, or in
regulations or other guidance published in the Internal Revenue Bulletin, for an amendment to
a § 403(b) Individually Designed Plan made with respect to a Form Defect first occurring after
March 31, 2020, the plan amendment deadline is the date on which the Remedial Amendment
Period with respect to the Form Defect ends, as determined under section 5.03.
.02 Plan amendment deadline for discretionary amendments. Except as otherwise provided by
statute, or in regulations or other guidance published in the Internal Revenue Bulletin, effective
for plan years beginning on or after January 1, 2020, for a discretionary amendment (that is, an
amendment that is not made with respect to a Form Defect) made to a § 403(b) Individually
Designed Plan, the plan amendment deadline is the date described in paragraph (1) or (2) of this
section 6.02, as applicable.
(1) Section 403(b) plan that is not a governmental plan. In the case of a discretionary amendment
to a plan other than a governmental plan within the meaning of § 414(d), the plan amendment
deadline is the end of the plan year in which the plan amendment is operationally put into effect.
An amendment is operationally put into effect when the plan is administered in a manner consis-
tent with the intended plan amendment.
(2) Section 403(b) plan that is a governmental plan. In the case of a discretionary amendment to
a governmental plan within the meaning of § 414(d), the plan amendment deadline is the later of:
(i) the end of the plan year in which the plan amendment is operationally put into effect; or
(ii) 90 days after the close of the second regular legislative session of the legislative body with the
authority to amend the plan that begins on or after the date the plan amendment is operation-
ally put into effect.
.03 Example illustrating plan amendment deadlines under sections 6.01 and 6.02. Employer X
maintains Plan Y, an existing non-governmental § 403(b) Individually Designed Plan that does
not provide for plan loans. The plan year of Plan Y is the calendar year. During the 2021 plan
year, Employer X makes plan loans available to all eligible participants in the plan in a manner
consistent with the requirements of the Code. Employer X amends Plan Y by the end of 2021 to
reflect the availability of plan loans. This amendment is adopted by the plan amendment deadline
set forth in section 6.02. If the language of the amendment does not comply with the § 403(b)
Requirements, then the plan has a Form Defect. In accordance with section 6.01, Employer X will
have until December 31, 2023, the end of the Remedial Amendment Period with respect to the
Form Defect as set forth in section 5.03(1)(b), to correct the Form Defect.

Bulletin No. 2019–42 953 October 15, 2019
SECTION 7. LIMITED EXTENSION OF INITIAL REMEDIAL AMENDMENT PERIOD FOR § 403(b) INDIVIDUALLY
DESIGNED PLANS
Pursuant to Rev. Proc. 2013-22 and Rev. Proc. 2017-18, the Initial Remedial Amendment Period
for a Form Defect first occurring on or before March 31, 2020, will end on March 31, 2020 (re-
gardless of whether the Form Defect first occurs near the beginning or near the end of the Initial
Remedial Amendment Period). To ensure that the time available for correcting a Form Defect first
occurring near the end of the Initial Remedial Amendment Period is at least as long as the time
available for correcting a Form Defect that first occurs after March 31, 2020, this section 7 extends
the Initial Remedial Amendment Period with respect to a § 403(b) Individually Designed Plan
Form Defect first occurring on or before March 31, 2020, to the later of: (i) March 31, 2020, or (ii)
the end of the Remedial Amendment Period provided under section 5, determined without regard
to the requirement in section 5.01 that the Form Defect first occur after March 31, 2020. However,
for a Form Defect that is related to a change in § 403(b) Requirements that was effective before
2019 (or that is integral to such change) and thus was not set forth in a Required Amendments List
(see section 8), the Initial Remedial Amendment Period remains March 31, 2020.
6
As an example
of the extension under this section 7, if a discretionary amendment that fails to satisfy the § 403(b)
Requirements is adopted and made effective on January 1, 2018, with respect to an Eligible Em-
ployer‘s existing non-governmental § 403(b) plan, then the Initial Remedial Amendment Period
with respect to the Form Defect will end on December 31, 2020, which is the later of March 31,
2020, or December 31, 2020 (the date the Initial Remedial Amendment Period would end under
section 5.03(1)(b) if that section applied). In contrast, if the amendment had been adopted and
made effective on January 1, 2017, then the Initial Remedial Amendment Period for the Form De-
fect would end on March 31, 2020, which is the later of March 31, 2020, or December 31, 2019 (the
date the Remedial Amendment Period would end under section 5.03(1)(b) if that section applied).
As another example, if a Form Defect is created as a result of a change in § 403(b) Requirements
with respect to an Eligible Employer’s existing non-governmental § 403(b) plan, and the change
in § 403(b) Requirements appears on the Required Amendments List in 2019, then the Initial Re-
medial Amendment Period with respect to the Form Defect will end on December 31, 2021, which
is the later of March 31, 2020, or December 31, 2021 (the date the Initial Remedial Amendment
Period for the Form Defect would end under section 5.03(1)(c) if that section applied).
SECTION 8. REQUIRED AMENDMENTS LIST
.01 Inclusion of changes in § 403(b) Requirements. The Treasury Department and the IRS annu-
ally publish a Required Amendments List that, in general, includes statutory and administrative
changes in § 401(a) qualification requirements that are first effective during the plan year in which
the list is published. Beginning with the Required Amendments List for 2019, each Required
Amendments List also, in general, will include changes in § 403(b) Requirements that are first
effective during the plan year in which the list is published. The Required Amendments List will
be used to determine the date that the Remedial Amendment Period ends for changes in § 403(b)
Requirements included on the list, in accordance with section 5.03.
.02 When a change in § 403(b) Requirements will be included on Required Amendments List. In
general, a change in § 403(b) Requirements will be included on a Required Amendments List after
6
Under section 5, the end of a Remedial Amendment Period for a Form Defect that is related to, or that is integral to, a change in § 403(b) Requirements is determined based on when the
change is included on a Required Amendments List. However, changes in § 403(b) Requirements were not included on a Required Amendments List before 2019.

October 15, 2019 954 Bulletin No. 2019–42
guidance with respect to such change (including a model amendment, if applicable) has been pro-
vided in regulations or in other guidance published in the Internal Revenue Bulletin. However, in
the discretion of the Treasury Department and the IRS, a change in § 403(b) Requirements may be
included on a Required Amendments List in other circumstances, such as when an amendment to
the Code is enacted and it is anticipated that no guidance will be issued related to implementation
of the statutory change.
SECTION 9. OPERATIONAL COMPLIANCE LIST
The Remedial Amendment Period permits a plan to be amended retroactively to comply with a
change in § 403(b) Requirements; however, a plan must be operated in compliance with a change
in § 403(b) Requirements beginning on the effective date of the change. To assist Eligible Em-
ployers in achieving operational compliance, beginning after the issuance of this revenue proce-
dure, updates to the Operational Compliance List currently maintained on the IRS website for
sponsors of qualified plans will also include changes in § 403(b) Requirements that are effective
during a calendar year. In order to comply with the § 403(b) Requirements, however, a plan must
comply operationally with each relevant § 403(b) Requirement, even if the requirement is not
included on an Operational Compliance List.
PART III.
SECTION 403(b) PRE-APPROVED PLANS
SECTION 10. SECTION 403(b) PRE-APPROVED PLAN CYCLE SYSTEM
.01 Establishment of recurring § 403(b) Pre-approved Plan Cycles. This section 10 establishes
a system of recurring § 403(b) Pre-approved Plan Cycles following the expiration of the Initial
Remedial Amendment Period on March 31, 2020. Under this system, during each § 403(b) Pre-ap-
proved Plan Cycle, a § 403(b) Pre-approved Plan Sponsor will be able to apply for a § 403(b)
Pre-approved Plan Letter for its plan during a one-year submission period, which generally will
occur at the beginning of each § 403(b) Pre-approved Plan Cycle. Guidance on the procedures for
applying for a § 403(b) Pre-approved Plan Letter and the timing of each § 403(b) Pre-approved
Plan Cycle will be issued prior to the opening of each submission period. When the IRS review
of the § 403(b) Pre-approved Plans that are submitted during a § 403(b) Pre-approved Plan Cycle
is near completion, the IRS will announce the date by which an adopting Eligible Employer must
adopt a newly approved plan for that § 403(b) Pre-approved Plan Cycle. This deadline is expected
to be a uniform date that will apply to all adopting Eligible Employers. It is expected that this
deadline will provide virtually all Eligible Employers approximately two years to adopt a newly
approved plan. See section 10.03 for more information regarding the § 403(b) Pre-approved Plan
Cycle that begins immediately after March 31, 2020.
.02 First § 403(b) Pre-approved Plan Cycle (Cycle 1). For purposes of the system of recurring
§ 403(b) Pre-approved Plan Cycles established by this section 10, the period covered by the Initial
Remedial Amendment Period (without regard to the extension under section 13) is considered the
first § 403(b) Pre-approved Plan Cycle (Cycle 1), and a § 403(b) Pre-approved Plan for which a
§ 403(b) Pre-approved Plan Letter is issued pursuant to Rev. Proc. 2013-22 is considered a Cycle 1
plan. A person that sponsors a § 403(b) Pre-approved Plan as a word-for-word identical adopter or
minor modifier of a Cycle 1 plan of a mass submitter is considered to have a Cycle 1 plan even if

Bulletin No. 2019–42 955 October 15, 2019
the person applies for a Cycle 1 § 403(b) Pre-approved Plan Letter (Cycle 1 letter) after March 31,
2020. Except as specifically provided in sections 12 and 13 of this revenue procedure, a Cycle 1
plan is subject to the procedures of Rev. Proc. 2013-22, rather than the procedures of this Part III.
.03 Second § 403(b) Pre-approved Plan Cycle (Cycle 2). The second § 403(b) Pre-approved Plan
Cycle (Cycle 2) under the system of recurring § 403(b) Pre-approved Plan Cycles begins immedi-
ately after March 31, 2020. The submission period for a § 403(b) Pre-approved Plan Sponsor to
apply for a Cycle 2 § 403(b) Pre-approved Plan Letter (Cycle 2 letter) for its plan is not expected
to begin until 2023. Prior to the beginning of the submission period, the IRS will issue additional
guidance on the recurring § 403(b) Pre-approved Plan Cycles, specific procedures for applying for
a Cycle 2 letter, and the requirements and procedures for an Eligible Employer to adopt a § 403(b)
Pre-approved Plan. As part of this additional guidance, the IRS intends to provide a cumulative
list of changes in § 403(b) Requirements, which is intended to identify all changes in § 403(b)
Requirements resulting from changes in statutes, or changes in regulations or other guidance pub-
lished in the Internal Revenue Bulletin, that were not taken into account during Cycle 1 and are
required to be taken into account in the written plan document submitted to the IRS for a Cycle 2
letter. A § 403(b) Pre-approved Plan that is submitted during the Cycle 2 submission period and
for which a Cycle 2 letter is issued is considered a Cycle 2 plan. After the IRS has issued Cycle
2 letters, in order to obtain reliance on a Cycle 2 letter, an Eligible Employer must adopt the ap-
proved version of the Cycle 2 plan during the window for adoption that will be announced by the
IRS in future guidance.
.04 Future § 403(b) Pre-approved Plan Cycles. It is anticipated that the system of § 403(b) Pre-ap-
proved Plan Cycles will continue after Cycle 2.
SECTION 11. RECURRING REMEDIAL AMENDMENT PERIODS FOR § 403(b) PRE-APPROVED PLANS
.01 In general. This section 11 establishes a system of recurring Remedial Amendment Periods
for § 403(b) Pre-approved Plan Form Defects first occurring after March 31, 2020. Under this
Remedial Amendment Period system, a § 403(b) Pre-approved Plan that does not satisfy § 403(b)
Requirements on any day solely as a result of a Form Defect will be considered to have satisfied
the § 403(b) Requirements on that date if, on or before the last day of the Remedial Amendment
Period with respect to the Form Defect, all provisions of the plan that are necessary to satisfy all
§ 403(b) Requirements related to the Form Defect have been adopted and made effective in form
and operation for the whole of the period.
.02 Beginning of Remedial Amendment Period. The Remedial Amendment Period with respect
to a § 403(b) Pre-approved Plan Form Defect that first occurs after March 31, 2020, begins at the
applicable time provided under section 5.02.
.03 End of Remedial Amendment Period. Except as otherwise provided by statute, or in regu-
lations or other guidance published in the Internal Revenue Bulletin, provided that an interim
amendment, as described in section 11.04, if applicable, is made timely in accordance with section
12 and in good faith with the intent of complying with the § 403(b) Requirements, the Remedial
Amendment Period with respect to a § 403(b) Pre-approved Plan Form Defect first occurring after
March 31, 2020, will end no earlier than the end of Cycle 2. The IRS intends to issue guidance
prior to the end of Cycle 2 that will provide additional rules for determining the end of the Reme-
dial Amendment Period with respect to a § 403(b) Pre-approved Plan Form Defect first occurring
after March 31, 2020.
.04 Interim amendment requirement for a change in § 403(b) Requirements.

October 15, 2019 956 Bulletin No. 2019–42
(1) In general. To promote compliance during a § 403(b) Pre-approved Plan Cycle with an amend-
ment to the Code or a change to § 403(b) Requirements in regulations or other guidance published
in the Internal Revenue Bulletin that affects provisions of a written plan document, an Eligible
Employer adopting a § 403(b) Pre-approved Plan generally must adopt an interim amendment with
respect to the change within the time period set forth in section 12. For purposes of this revenue
procedure, an interim amendment is an amendment to correct a Form Defect described in section
5.02(3) or (4) (that is, a Form Defect that results in the failure of a plan to satisfy § 403(b) Require-
ments by reason of a change in those requirements, or that is integral to the § 403(b) Requirement
that has been changed) that is related to a change in § 403(b) Requirements that is effective with
respect to the plan after March 31, 2020.
(2) Good-faith determination that no interim amendment is required. The Remedial Amendment
Period described in this section 11 also applies in cases in which the § 403(b) Pre-approved Plan
Sponsor (or Eligible Employer, if applicable) reasonably and in good faith determines, during
the period in which an interim amendment to reflect a change in § 403(b) Requirements would
otherwise be required under section 11.04(1), that no amendment is required because the change
to § 403(b) Requirements does not affect provisions of the written plan document. Thus, for ex-
ample, if a § 403(b) Pre-approved Plan Sponsor makes such a determination and the IRS finds that
an amendment is required, the plan would still be eligible for the Remedial Amendment Period
described in this section 11 to correct the Form Defect. The IRS will make the final determination
in all cases as to whether a new plan or an amendment to an existing plan was adopted with the
good-faith intention of complying with § 403(b) Requirements or whether the determination that
no interim amendment was required was reasonable and in good faith.
.05 Terminating plan. Notwithstanding any other provision of this section 11, the termination of
a § 403(b) Pre-approved Plan ends (and will generally shorten) the Remedial Amendment Period
for each Form Defect of the plan. Accordingly, any retroactive remedial plan amendments or
other required plan amendments for a terminating plan (that is, plan amendments required to be
adopted to reflect § 403(b) Requirements that apply as of the date of termination) must be adopted
in connection with the plan termination regardless of whether such requirements are included on
a Required Amendments List.
.06 Circumstances in which a Form Defect may not be corrected retroactively under a Remedial
Amendment Period. If it is not possible to amend a plan retroactively so that all provisions of the
plan that are necessary to satisfy § 403(b) Requirements related to the Form Defect are made ef-
fective in operation for the whole Remedial Amendment Period, then the requirements of section
11.01 will not be satisfied even if the Eligible Employer adopts a retroactive plan amendment that,
in form, appears to satisfy those requirements. This revenue procedure also does not permit a plan
to be made retroactively effective, for purposes of complying with § 403(b) Requirements, for a
taxable year prior to the taxable year of the Eligible Employer in which the plan was adopted by
the Eligible Employer. In addition, a § 403(b) plan for which an Eligible Employer corrects a Form
Defect after the expiration of the applicable Remedial Amendment Period will not be considered to
satisfy the requirements of § 403(b). However, an Eligible Employer maintaining a § 403(b) plan
that has a Form Defect that cannot be corrected by an amendment within the applicable Remedial
Amendment Period may be able to correct the Form Defect under EPCRS.
SECTION 12. PLAN AMENDMENT DEADLINE FOR § 403(b) PRE-APPROVED PLANS
.01 Plan amendment deadline. Except as otherwise provided in section 12.02, the deadline for
the timely adoption of an amendment for a § 403(b) Pre-approved Plan is determined as follows:
(1) Section 403(b) plan that is not a governmental plan.

Bulletin No. 2019–42 957 October 15, 2019
(a) Interim amendments. For a § 403(b) Pre-approved Plan that is not a governmental plan within
the meaning of § 414(d), a § 403(b) Pre-approved Plan Sponsor (or the Eligible Employer, if
applicable) is considered to have adopted an interim amendment described in section 11.04
timely if the amendment is adopted by the end of the calendar year after the calendar year in
which the change in § 403(b) Requirements is effective with respect to the plan.
(b) Discretionary amendments. Effective for plan years beginning on or after January 1, 2020,
for a § 403(b) plan that is not a governmental plan within the meaning of § 414(d), in the
case of a discretionary amendment (that is, an amendment that is not an interim amendment
described in section 11.04), an Eligible Employer (or a § 403(b) Pre-approved Plan Sponsor,
if applicable) is considered to have adopted the amendment timely if the plan amendment is
adopted by the end of the plan year in which the plan amendment is operationally put into ef-
fect. An amendment is operationally put into effect when the plan is administered in a manner
consistent with the intended plan amendment.
(2) Section 403(b) plan that is a governmental plan.
(a) Interim amendments. For a governmental plan within the meaning of § 414(d), in the case of
an interim amendment described in section 11.04, a § 403(b) Pre-approved Plan Sponsor (or
the Eligible Employer, if applicable) is considered to have adopted the amendment timely if
the plan amendment is adopted by the later of:
(i) the end of the calendar year after the calendar year in which the change in § 403(b) Re-
quirements is effective with respect to the plan; or
(ii) 90 days after the close of the third regular legislative session of the legislative body with
the authority to amend the plan that begins on or after the date the plan amendment be-
comes effective.
(b) Discretionary amendments. Effective for plan years beginning on or after January 1, 2020, for
a governmental plan within the meaning of § 414(d), in the case of a discretionary amendment
(that is, one that is not an interim amendment described in section 11.04), an Eligible Employ-
er (or a § 403(b) Pre-approved Plan Sponsor, if applicable) is considered to have adopted the
amendment timely if the plan amendment is adopted by the later of:
(i) the end of the plan year in which the plan amendment is operationally put into effect; or
(ii) 90 days after the close of the second regular legislative session of the legislative body
with authority to amend the plan that begins on or after the date the amendment becomes
effective.
.02 Exceptions to section 12.01 plan amendment deadlines. Section 12.01 applies unless a statu-
tory provision or guidance issued by the IRS sets forth an earlier deadline to adopt a discretionary
amendment with respect to a plan year or if a statutory provision or guidance provides another
specific deadline for the adoption of a particular type of interim amendment that is earlier or later
than the deadlines under section 12.01.
SECTION 13. LIMITED EXTENSION OF INITIAL REMEDIAL AMENDMENT PERIOD FOR CYCLE 1 PLANS
.01 In general. Provided that an amendment is made in accordance with section 13.03, if appli-
cable, this section 13 extends the Initial Remedial Amendment Period with respect to a § 403(b)
Pre-approved Plan Form Defect first occurring during Cycle 1, as described in section 10.02, so

October 15, 2019 958 Bulletin No. 2019–42
that the Initial Remedial Amendment Period will end no earlier than the end of Cycle 2, as de-
scribed in section 10.03. Prior to the end of Cycle 2, the IRS will issue guidance providing rules
for determining when the Initial Remedial Amendment Period ends with respect to a § 403(b)
Pre-approved Plan Form Defect first occurring during Cycle 1.
.02 Exception for certain Form Defects first occurring before January 1, 2018. The extension of
the Initial Remedial Amendment Period provided in section 13.01 does not apply to a Form Defect
that is not described in section 5.02(3) or (4) (that is a Form Defect that is not related to a change
in the § 403(b) Requirements, or that is integral to the change) and that first occurs before January
1, 2018. Accordingly, the end of the Initial Remedial Amendment Period for such a Form Defect
continues to be March 31, 2020. For example, if, with respect to an existing § 403(b) Pre-ap-
proved Plan, a discretionary amendment that was adopted and effective on January 1, 2015, failed
to satisfy the § 403(b) Requirements (and thus created a Form Defect), then, pursuant to this sec-
tion 13.02, the Initial Remedial Amendment Period for that Form Defect ends on March 31, 2020.
In contrast, if the amendment had become effective on January 1, 2018, then this section 13.02
would not apply and, pursuant to section 13.01, the Initial Remedial Amendment Period would not
end earlier than the end of Cycle 2.
.03 Plan amendment requirement for Form Defect related to a change in § 403(b) Requirements.
The extension of the Initial Remedial Amendment Period provided in section 13.01 will apply to a
Form Defect described in section 5.02(3) or (4) (that is, a Form Defect that results in the failure of
the plan to satisfy the § 403(b) Requirements by reason of a change in those requirements, or that
is integral to the § 403(b) Requirement that has been changed), only if the § 403(b) Pre-approved
Plan Sponsor (or the Eligible Employer, if applicable) timely adopts an initial amendment that is
intended in good faith to correct the Form Defect. To be considered timely, the initial amendment
must be adopted by the later of: (i) March 31, 2020, or (ii) the end of the calendar year after the
calendar year in which the change in § 403(b) Requirements is effective with respect to the plan. If
the initial amendment is adopted timely (or the § 403(b) Pre-approved Plan Sponsor (or the Eligi-
ble Employer, if applicable) determines in good faith that no amendment is required), then the Ini-
tial Remedial Amendment Period will end no earlier than the end of Cycle 2 (see section 11.04(2)
for rules for determining in good faith that no amendment is required). For example, if a Form
Defect is created as a result of a change in § 403(b) Requirements that became effective on January
1, 2020, then the § 403(b) Pre-approved Plan Sponsor (or the Eligible Employer, if applicable)
must adopt an initial good-faith amendment by December 31, 2021, in order for the Initial Reme-
dial Amendment Period to be extended so that it ends not earlier than the end of Cycle 2. By the
end of the extended Initial Remedial Amendment Period described in section 13.01, the § 403(b)
Pre-approved Plan Sponsor must correct any Form Defects in the initial good-faith amendment.
.04 Plan restatement does not supersede prior amendments to a Cycle 1 plan. For purposes of this
revenue procedure, a plan that is restated using a Cycle 1 plan will not be treated as superseding a
previously adopted amendment made with respect to a Form Defect described in section 5.02(3)
or (4) (that is, a Form Defect that results in the failure of the plan to satisfy the § 403(b) Require-
ments by reason of a change in those requirements, or that is integral to the § 403(b) Requirement
that has been changed) that is effective after the restatement’s effective date and that has not been
incorporated or reflected in the restatement, provided that the Cycle 1 plan is operated in a manner
consistent with the amendment. A plan is considered to be operating in compliance with such an
amendment in any case in which the operation of the plan cannot be determined. The following
example illustrates the application of this section 13.04. An Eligible Employer established a writ-
ten § 403(b) plan on January 1, 2010. On January 1, 2015, the Eligible Employer amended its
plan to comply with a change in § 403(b) Requirements that became effective on January 1, 2015.
On January 1, 2019, the Eligible Employer restated its plan using a Cycle 1 plan, and made the
restatement retroactive to January 1, 2010. The Cycle 1 plan does not include the language from
the January 1, 2015 amendment. Under this section 13.04, the restatement retroactive to January
1, 2010, is not treated as superseding the January 1, 2015 amendment, provided that the plan is
operated in a manner consistent with the amendment.

Bulletin No. 2019–42 959 October 15, 2019
SECTION 14. OPERATIONAL COMPLIANCE LIST
To assist Eligible Employers in achieving operational compliance, see the Operational Compliance
List described in section 9.
PART IV.
EFFECT ON OTHER DOCUMENTS, EFFECTIVE DATE, DRAFTING INFORMATION
SECTION 15. EFFECT ON OTHER DOCUMENTS
.01 Rev. Proc. 2013-22 is modified by this revenue procedure.
.02 Rev. Proc. 2017-18 is modified by this revenue procedure.
SECTION 16. EFFECTIVE DATE
This revenue procedure is effective September 30, 2019.
SECTION 17. DRAFTING INFORMATION
The principal author of this revenue procedure is Patrick T. Gutierrez of the Office of Associate
Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For further
information regarding this revenue procedure contact Patrick T. Gutierrez on (202) 317-4148 (not
a toll-free number).

October 15, 2019 960 Bulletin No. 2019–42
Part IV
Notice of Proposed
Rulemaking
Application of the Employer
Shared Responsibility
Provisions and Certain
Nondiscrimination Rules
to Health Reimbursement
Arrangements and Other
Account-Based Group
Health Plans Integrated
with Individual Health
Insurance Coverage or
Medicare
REG-136401-18
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemak-
ing.
SUMMARY: This document sets forth
proposed regulations to clarify the appli-
cation of the employer shared responsi-
bility provisions and certain nondiscrim-
ination rules under the Internal Revenue
Code (Code) to health reimbursement
arrangements (HRAs) and other ac-
count-based group health plans inte-
grated with individual health insurance
coverage or Medicare (individual cover-
age HRAs), and to provide certain safe
harbors with respect to the application
of those provisions to individual cov-
erage HRAs. The proposed regulations
are intended to facilitate the adoption of
individual coverage HRAs by employ-
ers, and taxpayers generally are permit-
ted to rely on the proposed regulations.
The proposed regulations would affect
employers, employees and their family
members, and plan sponsors.
DATES: Written or electronic comments
and requests for a public hearing must be
received by December 30, 2019.
ADDRESSES: Submit electronic submis-
sions via the Federal eRulemaking Portal
at https://www.regulations.gov (indicate
IRS and REG-136401-18) by following
the online instructions for submitting
comments. Once submitted to the Federal
eRulemaking Portal, comments cannot be
edited or withdrawn. The Department of
the Treasury (Treasury Department) and
the IRS will publish for public availability
any comment received to its public dock-
et, whether submitted electronically or in
hard copy. Send hard copy submissions
to: CC:PA:LPD:PR (REG-136401-18),
Room 5203, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may
be hand-delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m. to
CC:PA:LPD:PR (REG-136401-18), Cou-
rier’s Desk, Internal Revenue Service,
1111 Constitution Avenue NW, Washing-
ton, DC 20224.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Jennifer Solomon, (202) 317-
5500; concerning submissions of com-
ments and requests for a public hearing,
Regina Johnson, (202) 317-6901 (not toll-
free numbers).
SUPPLEMENTARY INFORMATION:
I. Background
A. Individual Coverage HRAs and
Related Guidance
On October 12, 2017, President Trump
issued Executive Order 13813, “Promot-
ing Healthcare Choice and Competition
Across the United States.”
1
The Executive
Order directed the Secretaries of the Trea-
sury, Labor, and Health and Human Ser-
vices to “consider proposing regulations
or revising guidance, to the extent permit-
ted by law and supported by sound poli-
cy, to increase the usability of HRAs, to
expand employers’ ability to offer HRAs
to their employees, and to allow HRAs
to be used in conjunction with nongroup
coverage.”
2
In response to the Executive Order, on
October 23, 2018, the Departments of the
Treasury, Labor, and Health and Human
Services (the Departments) issued pro-
posed regulations
3
under Public Health
Service Act (PHS Act) section 2711 and
the health nondiscrimination provisions
4

of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA)
5

and the Patient Protection and Afford-
able Care Act,
6
as amended by the Health
Care Education and Reconciliation Act
7

(collectively, PPACA) (proposed inte-
gration regulations). The proposed inte-
gration regulations included a proposal
to expand the potential use of HRAs and
other account-based group health plans
8

(collectively referred to in this preamble
as HRAs) by allowing the integration of
HRAs with individual health insurance
coverage, subject to certain conditions.
1
82 FR 48385 (Oct. 17, 2017).
2
Id.
3
See 83 FR 54420 (Oct. 29, 2018).
4
See Code sections 9802 and 9815, Employee Retirement Income Security Act (ERISA) sections 702 and 715, and PHS Act section 2705. Although Code section 9802 and ERISA section 702
were not amended by PPACA, the requirements of PHS Act section 2705 were also incorporated by reference into Code section 9815 and ERISA section 715. PPACA section 1201 moved
the PHS Act nondiscrimination provisions from section 2702 to section 2705, with some modifications.
5
Public Law 104-191.
6
Public Law 111-148.
7
Public Law 111-152.
8
See §54.9815-2711(d)(6)(i) for the definition of an account-based group health plan. This term does not include qualified small employer health reimbursement arrangements (QSEHRAs) (as
defined under section 9831(d)), medical savings accounts (see section 220), or health savings accounts (see section 223). In addition, for purposes of the integration regulations (both proposed
and final), the definition does not include an employer arrangement that reimburses the cost of individual health insurance coverage in a cafeteria plan under section 125.

Bulletin No. 2019–42 961 October 15, 2019
On June 14, 2019, the Departments
finalized the proposed integration regu-
lations, generally as proposed but with a
number of revisions in response to com-
ments (the final integration regulations).
9

The final integration regulations apply for
plan years beginning on or after January
1, 2020.
B. Premium Tax Credit (Section 36B)
Section 36B allows the premium tax
credit (PTC) to certain taxpayers to help
with the cost of individual health insur-
ance coverage enrolled in through an Ex-
change.
10
Under section 36B(a) and (b)(1),
and §1.36B-3(d), a taxpayer’s PTC is the
sum of the premium assistance amounts
for all coverage months during the taxable
year for individuals in the taxpayer’s fam-
ily.
An individual is eligible for the PTC
for a month if the individual satisfies var-
ious requirements for the month (a cover-
age month). Among other requirements,
under section 36B(c)(2), a month is not a
coverage month for an individual if either:
(1) the individual is eligible for coverage
under an eligible employer-sponsored
plan and that coverage is affordable and
provides minimum value (MV); or (2) the
individual enrolls in an eligible employ-
er-sponsored plan, even if the coverage is
not affordable or does not provide MV.
11
In general, an eligible employer-spon-
sored plan is affordable for an employee
if the amount the employee must pay for
self-only coverage whether by salary re-
duction or otherwise (the employee’s re-
quired contribution) for a plan does not
exceed a percentage (the required con-
tribution percentage
12
) of the employee’s
household income.
13
In addition, in gen-
eral, an eligible employer-sponsored plan
provides MV if the plan’s share of the
total allowed costs of benefits provided
under the plan is at least 60 percent of the
costs and if the plan provides substantial
coverage of inpatient hospitalization and
physician services.
14
An eligible employer-sponsored plan
includes coverage under a self-insured
group health plan
15
and is minimum es-
sential coverage (MEC) unless it consists
solely of excepted benefits.
16
An HRA is a
self-insured group health plan and, there-
fore, is an eligible employer-sponsored
plan.
17
Accordingly, an individual is inel-
igible for the PTC for a month if the indi-
vidual is (1) covered by an HRA, or (2)
eligible for an HRA that is affordable and
provides MV for the month (provided the
HRA does not consist solely of excepted
benefits).
On October 23, 2018, in connection
with the proposed integration regulations,
the Treasury Department and the IRS pro-
posed regulations under section 36B to
provide guidance regarding the circum-
stances in which an individual coverage
HRA would be considered to be affordable
and to provide MV. On June 14, 2019, in
connection with the final integration regu-
lations, the Treasury Department and the
IRS finalized the rules under section 36B,
substantially as proposed but with some
clarifications in response to comments
(the final PTC regulations).
18
Under the final PTC regulations, an in-
dividual coverage HRA is considered to be
affordable for a month if the employee’s
required HRA contribution for the month
does not exceed 1/12 of the product of
the employee’s household income for the
taxable year and the required contribution
percentage. The required HRA contribution
is the excess of: (1) the monthly premium
for the lowest cost silver plan for self-on-
ly coverage of the employee offered in the
Exchange for the rating area in which the
employee resides (the PTC affordability
plan
19
), over (2) in general, the self-only
amount the employer makes newly avail-
able to the employee under the individual
coverage HRA for the month (the monthly
HRA amount).
20
Under the final PTC reg-
ulations, an individual coverage HRA that
is affordable is treated as providing MV.
The final PTC regulations apply for taxable
years beginning on or after January 1, 2020.
C. Employer Shared Responsibility
Provisions (Section 4980H)
1. In General
The employer shared responsibility
provisions under section 4980H apply to
an employer that is an applicable large
employer (ALE). In general, an employer
is an ALE for a calendar year if it had an
average of 50 or more full-time employees
(including full-time equivalent employ-
ees) during the preceding calendar year.
21
9
See 84 FR 28888 (June 20, 2019). In addition to the final integration regulations: (1) The Departments issued final regulations setting forth conditions under which certain HRAs will be
recognized as limited excepted benefits; (2) the Department of Health and Human Services (HHS) issued final regulations to provide a special enrollment period in the individual market for
individuals who newly gain access to an individual coverage HRA or who are newly provided a QSEHRA; (3) the Department of Labor (DOL) finalized a safe harbor to provide assurance that
the individual health insurance coverage for which premiums are reimbursed by an HRA or a QSEHRA does not become part of an ERISA plan, provided certain conditions are satisfied (and
the Departments provided a related clarification of the definition of the term “group health insurance coverage”); and (4) the Treasury Department and the IRS finalized regulations regarding
premium tax credit eligibility for individuals offered an individual coverage HRA, as explained in this preamble. In this document, this package of regulations is referred to collectively as
the “final regulations.”
10
Exchanges are entities established under PPACA section 1311 or 1321, through which qualified individuals and qualified employers can purchase health coverage.
11
See section 36B(c)(2)(C)(iii) and §§1.36B-2(c)(3) and 1.36B-3(c).
12
See §1.36B-2(c)(3)(v)(C). The required contribution percentage for 2020 is 9.78 percent (see Rev. Proc. 2019-29).
13
See section 36B(c)(2)(C) and §1.36B-2(c)(3)(v)(A)(1) and (2). See §1.36B-2(c)(3)(v)(A)(3) for a safe harbor that, in certain circumstances, allows an employee to claim the PTC even if
the offer of coverage ultimately is affordable.
14
See section 36B(c)(2)(C)(ii); see also 80 FR 52678 (Sept. 1, 2015).
15
See §1.5000A-2(c).
16
See section 5000A(f)(3) and §1.5000A-2(g).
17
See Notice 2013-54, 2013-40 IRB 287, Q&A 10.
18
See 84 FR 28888 (June 20, 2019).
19
The term “affordability plan” is also used in this preamble and refers to the lowest cost silver plan used to determine affordability of an individual coverage HRA, which for purposes of
section 36B means the PTC affordability plan and for section 4980H means either the PTC affordability plan or the lowest cost silver plan determined under the safe harbors provided in the
proposed regulations, if applicable.
20
See §1.36B-2(c)(5)(ii) for more information on how the required HRA contribution is determined, including in cases in which the employer makes the same amount available for all em-
ployees regardless of the number of individuals covered.
21
See section 4980H(c)(2) and §54.4980H-2. See also §54.4980H-1(a) for definitions of the terms used in this preamble.

October 15, 2019 962 Bulletin No. 2019–42
For any month, an ALE may be liable
for an employer shared responsibility
payment under either section 4980H(a) or
4980H(b), or neither, but an ALE may not
be liable for a payment under both sec-
tions 4980H(a) and 4980H(b).
22
An ALE
generally is liable for a payment under
section 4980H(a) for a month if it fails to
offer coverage under an eligible employ-
er-sponsored plan to at least 95 percent
of its full-time employees (and their de-
pendents) and at least one full-time em-
ployee is allowed the PTC for purchas-
ing individual health insurance coverage
through an Exchange. An ALE is liable
for a payment under section 4980H(b)
for a month if it offers coverage under
an eligible employer-sponsored plan to at
least 95 percent
23
of its full-time employ-
ees (and their dependents), but at least
one full-time employee is allowed the
PTC for purchasing individual health in-
surance coverage through an Exchange,
which may occur because the ALE did
not offer coverage to that particular full-
time employee or because the coverage
the employer offered was unaffordable or
did not provide MV.
24
2. Section 4980H Affordability Safe
Harbors Regarding Household Income
Whether an employee may claim the
PTC depends on the rules under sec-
tion 36B, including the rules for whether
an offer of coverage by the employer is
affordable and provides MV.
25
However,
the regulations under section 4980H pro-
vide certain safe harbors for determining
whether an ALE is treated as making an
offer of coverage that is affordable for pur-
poses of section 4980H. More specifically,
as noted earlier in this preamble, whether
an offer of an eligible employer-sponsored
plan is affordable, both for purposes of
section 36B and section 4980H, depends
in part on the employee’s household in-
come. Because an employer generally
does not know an employee’s household
income, §54.4980H-5(e) provides that,
for purposes of section 4980H(b), an em-
ployer may substitute for an employee’s
household income an amount based on the
employee’s wages from the Form W-2,
“Wage and Tax Statement,” the employ-
ee’s rate of pay, or the federal poverty line,
using the household income safe harbors
(the HHI safe harbors).
26
The HHI safe harbors are option-
al and apply only for purposes of sec-
tion 4980H(b). An ALE may choose to use
one or more of the HHI safe harbors for
all of its employees or for any reasonable
category of employees, provided it does
so on a uniform and consistent basis for
all employees in a category. In addition,
an ALE may use an HHI safe harbor only
if the ALE offers its full-time employees
and their dependents eligible employ-
er-sponsored coverage that provides MV
with respect to the self-only coverage
offered to the employee. If, in applying
one of the HHI safe harbors the offer of
coverage is considered affordable, then
the employer will not be subject to an em-
ployer shared responsibility payment un-
der section 4980H(b) with respect to that
employee, even if the employee is allowed
the PTC.
3. Application of Section 4980H to
Individual Coverage HRAs
In implementing the objectives of
Executive Order 13813, the Treasury
Department and the IRS considered the
application of section 4980H to an ALE
that offers an individual coverage HRA.
Accordingly, on November 19, 2018, the
Treasury Department and the IRS issued
Notice 2018-88,
27
which described a num-
ber of potential approaches related to the
interaction of the proposed integration
regulations and section 4980H.
For clarity, the notice confirmed that
an individual coverage HRA is an eligible
employer-sponsored plan, and, therefore,
an offer of an individual coverage HRA
constitutes an offer of an eligible employ-
er-sponsored plan for purposes of sec-
tion 4980H(a). Consequently, if an ALE
offers an individual coverage HRA to at
least 95 percent of its full-time employees
(and their dependents), the ALE will not
be liable for an employer shared responsi-
bility payment under section 4980H(a) for
the month, regardless of whether any full-
time employee is allowed the PTC.
The notice also explained how sec-
tion 4980H(b) (including the HHI safe
harbors) would apply to an ALE that
offers an individual coverage HRA, de-
scribed potential additional affordability
safe harbors related to offers of individual
coverage HRAs, requested comments, and
provided examples. The Treasury Depart-
ment and the IRS received a number of
comments in response to Notice 2018-88,
all of which were considered and are ad-
dressed in this preamble. See part II of this
preamble for a more detailed discussion of
the approaches described in Notice 2018-
88 and the extent to which those potential
approaches are included in the proposed
regulations.
D. Section 105
In general, section 105(b) excludes
from gross income amounts received by an
employee through employer-provided ac-
cident or health insurance if those amounts
are paid to reimburse expenses for medi-
cal care (as defined in section 213(d)) in-
curred by the employee (for medical care
of the employee, the employee’s spouse,
or the employee’s dependents, as well as
children of the employee who are not de-
pendents but have not attained age 27 by
the end of the taxable year) for personal
injuries and sickness.
22
For simplicity, this preamble refers to ALEs and employers, but to the extent the preamble is addressing the potential for liability under section 4980H, those terms refer to an ALE member.
An ALE member is a person that, together with one or more other persons, is treated as a single employer that is an ALE, if applicable. Liability under section 4980H applies separately to
each ALE member. See §54.4980H-1(a)(5). Further, the reporting obligations under section 6056 also apply to ALE members and references to employers or ALEs with respect to reporting
under section 6056 should be read to refer to ALE members.
23
If an ALE offers coverage to all but five of its full-time employees (and their dependents), and five is greater than five percent of the employer’s full-time employees, the employer will not
be liable for an employer shared responsibility payment under section 4980H(a). See §54.4980H-4.
24
See §54.4980H-5.
25
See section 4980H(c)(3). See also §§54.4980H-1(a)(28) and 54.4980H-5(e)(1).
26
Whether or not an employee has been offered affordable coverage for purposes of eligibility for the PTC is determined under section 36B(c)(2)(C)(i) and the regulations thereunder (as
opposed to the section 4980H safe harbors).
27
See Notice 2018-88, 2018-49 IRB 817.

Bulletin No. 2019–42 963 October 15, 2019
Section 105(h) provides, however, that
excess reimbursements (as defined in sec-
tion 105(h)(7)) paid to a highly compensat-
ed individual (as defined in section 105(h)
(5) and §1.105-11(d)) (an HCI)
28
under a
self-insured medical reimbursement plan
are includible in the gross income of the
HCI if either (1) the plan discriminates in
favor of HCIs as to eligibility to partici-
pate in the plan, or (2) the benefits provid-
ed under the plan discriminate in favor of
HCIs (nondiscriminatory benefits rule).
29

Section 105(h)(4) provides that a self-in-
sured medical reimbursement plan does
not satisfy the nondiscriminatory benefits
rule unless all benefits provided to HCIs
are also provided to all other partici-
pants.
30
However, a plan that reimburses
employees solely for premiums paid un-
der an insured plan is treated as an insured
plan and is not subject to these rules.
31
The regulations under section 105(h)
provide that, in order to satisfy the non-
discriminatory benefits rule under sec-
tion 105(h)(4), all benefits made available
under a self-insured medical reimburse-
ment plan to an HCI (and the HCI’s depen-
dents) must also be made available to all
other participants (and their dependents).
32

In addition, the regulations provide that
“any maximum limit attributable to em-
ployer contributions must be uniform for
all participants and for all dependents of
employees who are participants and may
not be modified by reason of a partici-
pant’s age or years of service.”
33
The con-
sequence of a plan failing to satisfy this
nondiscriminatory benefits requirement is
that any excess reimbursements paid un-
der the plan to an HCI are includible in the
gross income and wages of the HCI.
HRAs generally are subject to the
rules under section 105(h) and its related
regulations because they are self-insured
medical reimbursement plans.
34
Howev-
er, HRAs that make available reimburse-
ments to employees only for premiums
paid to purchase health insurance poli-
cies, including individual health insurance
policies, but not other expenses, are not
subject to the rules under section 105(h)
and its related regulations.
35
Notice 2018-
88 addressed the interaction of individ-
ual coverage HRAs and section 105(h)
and explained potential future guidance.
The Treasury Department and the IRS re-
ceived comments in response to the sec-
tion 105(h) safe harbor in Notice 2018-
88, all of which were considered and are
addressed in this preamble. See later in
this preamble for a more detailed discus-
sion of the approaches described in No-
tice 2018-88 and the extent to which those
approaches are included in the proposed
regulations.
II. Explanation of Provisions and
Summary of Comments
Taking into account the comments re-
ceived in response to Notice 2018-88, as
well as comments received in response to
the proposed integration regulations and
proposed PTC regulations, the Treasury
Department and the IRS propose the fol-
lowing regulations under sections 4980H
and 105 to clarify the application of those
sections to individual coverage HRAs and
to provide related safe harbors to ease the
administrative burdens of avoiding lia-
bility under section 4980H and avoiding
income inclusion under section 105(h).
These proposed regulations do not include
any changes to the final integration regu-
lations or the final PTC regulations.
A. Section 4980H Proposed Regulations
The Treasury Department and the IRS
note that section 4980H relates only to
offers of coverage by an ALE to its full-
time employees (and their dependents).
As a result, to the extent an employer is
not an ALE, or is an ALE but offers an in-
dividual coverage HRA to employees who
are not full-time employees, the employer
need not consider the application of sec-
tion 4980H in determining those offers,
and, therefore, it need not identify an af-
fordability plan for those employees.
1. Location-Related Issues
a. Location Safe Harbor – In General
As noted earlier in part I(B) of this
preamble, under the final PTC regula-
tions, whether an offer of an individual
coverage HRA is affordable for an em-
ployee depends, in part, on the monthly
premium for the PTC affordability plan
for that employee (that is, the lowest cost
silver plan for self-only coverage of the
employee offered through the Exchange
for the rating area in which the employee
resides). In Notice 2018-88, the Treasury
Department and the IRS expressed con-
cerns about the burden on employers that
could result from requiring affordability
to be determined based on each employ-
ee’s place of residence, noting that em-
ployees’ places of residence might change
over time and employers may have dif-
ficulty keeping their records up to date.
Accordingly, Notice 2018-88 described
a potential safe harbor under which, for
purposes of determining affordability un-
der section 4980H(b), an ALE would be
allowed to use the lowest cost silver plan
for the employee for self-only coverage
offered through the Exchange in the rating
area in which the employee’s primary site
of employment is located, instead of the
lowest cost silver plan for the employee in
the rating area in which the employee re-
28
Generally, section 105(h)(5) and §1.105-11(d) define an HCI to include any employee that is among the highest paid 25 percent of all employees (including the five highest paid officers,
but not including employees excludible under §1.105-11(c)(2)(iii) who are not participants in any self-insured medical reimbursement plan of the employer).
29
See section 105(h)(1) and (2).
30
See §1.105-11(c)(3)(i).
31
See §1.105-11(b)(2).
32
See §1.105-11(c)(3)(i).
33
Id.
34
See §1.105-11(b)(1); see also Notice 2002-45, 2002-28 CB 93.
35
See §1.105-11(b)(2). HRAs that provide for the reimbursement of premiums to purchase health insurance policies in addition to other medical care expenses are subject to the rules un-
der section 105(h) and the regulations thereunder because the HRA amounts may be used to reimburse medical care expenses other than premiums for health insurance policies. PHS Act
section 2716, as incorporated into the Code by section 9815, applies nondiscrimination rules similar to section 105(h) to insured coverage and may apply to HRAs that only provide for the
reimbursement of premiums. However, under Notice 2011-1, 2011-2 IRB 259, the Departments determined that compliance with PHS Act section 2716 should not be required (and, thus, any
sanctions for failure to comply would not apply) until after regulations or other administrative guidance of general applicability has been issued under PHS Act section 2716.

October 15, 2019 964 Bulletin No. 2019–42
sides (the location safe harbor). The Trea-
sury Department and the IRS requested
comments on the location safe harbor and
whether an alternative safe harbor would
be preferable and, if so, why.
One commenter was not supportive
of the need for a location safe harbor, as-
serting that employers will likely want to
determine affordability based on the cost
of the lowest cost silver plan where the
employee resides and disagreeing with the
premise that it is difficult for employers to
track employees’ current addresses. How-
ever, a number of commenters indicated
that a location safe harbor is needed, but
that the anticipated safe harbor is too nar-
row because it would require employers
with worksites located in multiple rating
areas, including national employers, to cal-
culate affordability for section 4980H(b)
purposes separately for numerous rating
areas. One commenter suggested that larg-
er employers may be unwilling to offer in-
dividual coverage HRAs if employers are
required to track and align HRAs on a rat-
ing-area basis, noting that for traditional
employer-sponsored coverage, employers
generally need only look to the cost of a
single plan to determine affordability.
Some commenters suggested that one
lowest cost silver plan be used to deter-
mine affordability employer-wide, such as
the lowest cost silver plan in the rating area
in which the employer’s headquarters is
located. Some commenters suggested em-
ployers be allowed to use one lowest cost
silver plan to determine affordability for
all employees with a worksite in a partic-
ular state or metropolitan statistical area,
which, at least one suggested, the Centers
for Medicare & Medicaid Services (CMS)
could determine and make available to
the public. Some commenters suggested
a nationwide affordability plan should be
provided for purposes of section 4980H,
which could apply for all employers, and
could be calculated based on the national
average cost of lowest cost silver plans,
perhaps averaged over multiple years.
One commenter noted that although a na-
tionwide plan may have a relatively high
cost, it would provide simplicity. Some
commenters opposed broadening the lo-
cation safe harbor, including providing a
nationwide safe harbor, due to concerns
about evasion of section 4980H and en-
abling lower contributions to individual
coverage HRAs, relative to amounts de-
termined based on an employee’s actual
residence.
As a general matter, the Treasury De-
partment and the IRS acknowledge that in
determining the affordability of traditional
employer-sponsored coverage, employers
generally use the cost of one plan (that is,
the lowest cost plan providing MV that
the employer offers to the employees) and
that the cost of that plan does not vary by
employee (or, in general, varies by broad
categories of employees). In contrast, the
affordability test for individual coverage
HRAs is based on the cost of the appli-
cable lowest cost silver plan for each em-
ployee, which will vary by employee, by
virtue of the fact that the cost of individ-
ual health insurance coverage varies on
an individual basis, including based on an
individual’s residence and age. The Trea-
sury Department and the IRS recognize
that this difference may impose additional
complexity with respect to the application
of section 4980H to individual coverage
HRAs, as compared to traditional employ-
er-sponsored coverage. However, for pur-
poses of section 36B, whether coverage is
affordable is an employee-by-employee
determination and for an individual cov-
erage HRA, where there is no traditional
employer-sponsored coverage on which
to base an employee contribution, the
employee’s required contribution must be
based on the cost of an individual health
insurance plan, as employees generally
are required to have individual health in-
surance coverage in order to enroll in the
individual coverage HRA. The Treasury
Department and the IRS have considered
ways in which, consistent with the law,
application of the affordability test under
the final PTC regulations can and should
be modified in applying section 4980H.
However, by virtue of the ways in which
individual coverage HRAs differ from
traditional employer-sponsored coverage,
the determination of affordability under
section 36B (and, accordingly, under sec-
tion 4980H) differs for these two types of
coverage, and the Treasury Department
and the IRS expect that employers will
take those differences into account in de-
termining whether, and to whom, to offer
an individual coverage HRA.
The Treasury Department and the IRS
continue to be concerned about the bur-
den imposed on employers in determin-
ing each full-time employee’s place of
residence, due to the fact that employees’
places of residence might change with
some frequency, and it could be difficult
for employers to keep their records up to
date. The Treasury Department and the
IRS also recognize the administrative
simplicity for employers with workers in
different locations of being able to use the
cost of a single plan to determine afford-
ability for all workers. However, none of
the suggested expansions of the location
safe harbor would be based on a reason-
able proxy for the cost that would deter-
mine whether the employee would be
allowed the PTC (which is the basis for
the employer shared responsibility pay-
ment under section 4980H(b)), and none
would provide a substitute for a cost that
the employer would otherwise be unable
to identify in advance of the plan year. As
a result, adoption of any of the suggest-
ed expansions of the location safe harbor
could lead to a significant number of cases
in which one or more of an ALE’s full-time
employees are allowed the PTC while the
ALE is treated as providing those full-
time employees affordable coverage, with
the result that the ALE is not liable for an
employer shared responsibility payment.
These concerns are particularly acute
because of significant differences in in-
dividual health insurance plan premiums
that exist in different geographic locations,
including from rating area to rating area,
not only across the country, but also with-
in many states. Accordingly, an afford-
ability plan based on a nationwide average
cost or, in many cases, a statewide average
cost, would allow an ALE with full-time
employees in locations with above-aver-
age lowest cost silver plan premiums to
offer an individual coverage HRA, the
amount of which is based on an affordabil-
ity calculation using the average cost. The
ALE could then ensure that employees
were informed of the ability to enroll in an
Exchange plan subsidized by a potentially
larger PTC, if they declined the individu-
al coverage HRA. In that case, the ALE
would not only avoid an employer shared
responsibility payment, but also would
avoid the cost of funding the employees’
individual coverage HRAs (or any other
healthcare benefits). Meanwhile, those
employers with employees in below-aver-

Bulletin No. 2019–42 965 October 15, 2019
age cost locations generally could use the
actual cost in those lower-cost locations
to determine affordability for those em-
ployees.
36
This result would run counter to
the language and intent of section 4980H,
which directly ties liability for an employ-
er shared responsibility payment to one or
more full-time employees being allowed
the PTC.
The Treasury Department and the IRS
recognize that a safe harbor based on the
employee’s primary site of employment
could raise similar issues of avoidance of
the employer shared responsibility pay-
ment, but it would be on a much more lim-
ited scale. It is possible that the premium
for the lowest cost silver plan based on an
employee’s worksite will be more expen-
sive or less expensive than the premium
for the lowest cost silver plan based on the
employee’s residence, in cases in which
the employee resides in a location that has
a different lowest cost silver plan than the
location in which the worksite is located.
However, the Treasury Department and
the IRS expect that many employees live
in relatively close proximity to where they
work, in which case it is likely that the lo-
cation used to determine the affordability
plan for purposes of sections 4980H and
36B would be the same. Further, the Trea-
sury Department and the IRS also expect
that even if an employee does not live and
work in the same location for purposes
of determination of the lowest cost silver
plan, the employee is likely to live and
work in locations that are relatively close,
in which case the variation between the
cost of the lowest cost silver plan where
the employee lives versus the cost of the
lowest cost silver plan where the employee
works is likely to be less significant than
the variation that would be introduced by
a statewide or national average plan cost.
Thus, the Treasury Department and the
IRS have concluded that the cost of the
affordability plan at an employee’s pri-
mary site of employment is a reasonable
proxy for the cost of the affordability plan
at the employee’s residence for purposes
of section 4980H, while avoiding the bur-
dens that may arise for some employers in
keeping records of their employees’ cur-
rent residences. Therefore, the proposed
regulations provide that for purposes of
section 4980H(b), an employer may use
the lowest cost silver plan for the employ-
ee for self-only coverage offered through
the Exchange where the employee’s pri-
mary site of employment is located for
determining whether an offer of an indi-
vidual coverage HRA to a full-time em-
ployee is affordable. Further, the proposed
regulations provide that the location safe
harbor may be used in combination with
the other safe harbors provided in the pro-
posed regulations.
In response to comments asking for
a single affordability plan for purposes
of section 4980H, the Treasury Depart-
ment and the IRS note that an ALE that
wants to contribute one set amount to
individual coverage HRAs that would
protect the ALE from liability under sec-
tion 4980H(b) could set the amount by
determining affordability based on the
lowest cost silver plan that has the highest
cost premium for self-only coverage for
any of its full-time employees (that is, na-
tionally or based on multiple rating areas
or states). This would result, however, in
employees who live in locations with low-
er premiums receiving a benefit beyond
the minimum required to protect against
liability under section 4980H (and, thus, a
higher cost to the employer than necessary
solely to protect against that liability), and
permit those same employees to purchase
more generous plans than employees liv-
ing in the higher-premium locations.
Nonetheless, in view of the many dif-
ferences in premiums geographically,
and in view of the comments requesting
a broader location safe harbor, the Trea-
sury Department and the IRS recognize
the simplicity that one or more such safe
harbors could provide and the value to
employers of being able to design uniform
health coverage for all employees, with-
out needing to tie the uniform amount to
the highest cost affordability plan. Con-
sequently, the Treasury Department and
the IRS request comments regarding oth-
er methods of determining affordability
under section 4980H that would not re-
sult in significant discrepancies between
full-time employees being allowed the
PTC and ALEs avoiding liability under
section 4980H, or otherwise allow ALEs
to avoid the costs of providing health-
care benefits by shifting those costs to the
Federal government through access to the
PTC. To the extent any method relies on
data such as cost variances across geo-
graphic locations, variations of employ-
ee populations across geographic loca-
tions, or other similar data, considerations
should include the availability of the data,
including availability of that data at times
sufficiently in advance to be usable by
employers for determining plan designs
for a subsequent year, how the data would
be used both by employers and the IRS in
determining the affordability plan for pur-
poses of section 4980H, and how changes
in the data over time would be integrated
into the suggested methodology.
b. Identifying the Primary Site of
Employment under the Location Safe
Harbor
With respect to the location safe har-
bor, commenters raised a number of ques-
tions as to how and when to determine an
employee’s primary site of employment.
More specifically, commenters noted that
determining the primary worksite for em-
ployees who work in multiple locations
and do not have a set worksite could be
challenging and asked that rules allow
employers flexibility in making this de-
termination. Commenters also asked for
clarification on how the primary site of
employment is determined for employees
who telework, which commenters noted
is increasing the geographic distribution
of workers. In addition, commenters also
asked for clarification about when in re-
lation to the plan year an employee’s
worksite is determined, with one suggest-
ing it be determined based on the worksite
six months prior to the plan year or as of
the date of hire. Commenters further re-
quested that the proposed regulations ad-
dress mid-year changes in worksite loca-
tions and that employers be able to use the
initial affordability plan for the plan year
regardless of later worksite changes.
36
The Treasury Department and the IRS note that, in addition to considering section 4980H, employers will also need to take into account other applicable guidance in determining amounts
to make available in individual coverage HRAs, including the same terms requirement (§54.9802-4(c)(3)) under the final integration regulations.

October 15, 2019 966 Bulletin No. 2019–42
In response to these comments, for pur-
poses of the location safe harbor, the pro-
posed regulations provide that an employ-
ee’s primary site of employment generally
is the location at which the employer rea-
sonably expects the employee to perform
services on the first day of the plan year
(or on the first day the individual cover-
age HRA may take effect, for an employ-
ee who is not eligible for the individual
coverage HRA on the first day of the plan
year), except that the employee’s primary
site of employment is treated as changing
if the location at which the employee per-
forms services changes and the employer
expects the change to be permanent or
indefinite.
37
In that case, in general, the
employee’s primary site of employment is
treated as changing no later than the first
day of the second calendar month after the
employee has begun performing services
at the new location. This rule is intended
to strike the appropriate balance between
requiring that employee-specific, up-to-
date information be used to determine
affordability under section 4980H and al-
lowing employers time to address the ad-
ministrative aspects of accounting for an
employee’s change in primary worksite.
The proposed regulations also include
a special rule for determining primary
worksite for the first plan year that an em-
ployer offers an individual coverage HRA
(or first offers an individual coverage HRA
to a particular class of employees). Specif-
ically, if an employer is first offering an
individual coverage HRA to a class of em-
ployees, and the change in worksite occurs
prior to the individual coverage HRA’s
initial plan year, the employee’s primary
site of employment is treated as changing
no later than the later of the first day of the
plan year or the first day of the second cal-
endar month after the employee has begun
performing services at the new location.
This is to provide certainty to employers
first offering individual coverage HRAs to
account for changes in circumstances that
may occur in the months leading up to the
plan year, including in close proximity to
the first day of the plan year. For subse-
quent plan years, the general rule should
take into account, for instance, changes in
residence after an open enrollment period
but before the beginning of the plan year.
In the case of an employee who reg-
ularly works from home or at another
worksite that is not on the employer’s
premises but who may be required by his
or her employer to work at, or report to, a
particular worksite, such as a teleworker
with an assigned office space, the worksite
to which the employee would report to
provide services if requested is the appli-
cable primary site of employment. The
proposed regulations provide that in the
case of an employee who works remotely
from home or at another worksite that is
not on the employer’s premises and who
otherwise does not have a particular as-
signed office space or a worksite to which
to report, the employee’s residence is the
primary site of employment.
The Treasury Department and the
IRS recognize that the manner in which
employees report to work varies widely
across employers and industries. There-
fore, the Treasury Department and the IRS
request comments on whether any further
clarification is needed regarding determi-
nation of the primary site of employment
for purposes of the section 4980H location
safe harbor.
c. Employee Residence
Notwithstanding the location safe har-
bor, one commenter expressed an interest
in using each employee’s residence to
determine affordability for purposes of
section 4980H. The use of the location
safe harbor under the proposed regula-
tions is optional for an employer, and if
an employer opts not to use the location
safe harbor, then the PTC affordability
plan (that is, the lowest cost silver plan
for the employee based on the employee’s
residence) would be used to determine the
affordability of the offer of the individual
coverage HRA.
38
However, the Treasury
Department and the IRS expect that most
employers will choose to use the location
safe harbor, in part because under the final
integration regulations, an employer may
offer and vary individual coverage HRAs
for a class of employees whose primary
site of employment is in the same rating
area, but the final integration regulations
do not provide a class of employees based
on an employee’s residence.
39
Thus, be-
cause the final integration regulations do
not provide for a class of employees based
on the location of employees’ residenc-
es, an employer basing affordability on
the residences of employees would need
to use the lowest cost silver plan with the
highest cost premium for self-only cover-
age at the residence of any employees in
the class.
This commenter also requested clar-
ification regarding when an employer
may determine an employee’s residence
during the calendar year to identify the
appropriate plan to be used to determine
affordability, and included specific sug-
gestions including a snapshot date six
months prior to the plan year or date of
hire for those not employed at that time.
The proposed regulations do not provide
any rules addressing the ability of an
employer to identify the residence of the
employee in the case of an employer who
chooses to determine the affordability of
the individual coverage HRA based on
the residence of each employee instead of
using the location safe harbor. However,
the Treasury Department and the IRS re-
quest comments on whether, in the case
of an individual coverage HRA and for
purposes of determining the location of
the employee’s residence, rules allowing
the use of a snapshot date in a specified
period prior to the beginning of the plan
year, rules allowing a short delay in the
37
The final integration regulations allow individual coverage HRAs to be offered based on different classes of employees. One class of employees, as set forth in §54.9802-4(d)(2)(v), is
employees whose primary site of employment is in the same rating area (with rating area defined in 45 CFR 147.102(b)). The final integration regulations do not provide a specific definition
for primary site of employment, and the definition provided in the proposed regulations applies only for purposes of section 4980H.
38
Note that, as discussed in part II(A)(4) of this preamble, although the safe harbors in the proposed regulations are optional, if an ALE chooses to use them, it must do so based on the classes
of employees set forth in the final integration regulations. Also note that, later in this preamble, the Treasury Department and the IRS explain the extent to which the other safe harbors provided
under the proposed regulations may apply to the PTC affordability plan, for purposes of section 4980H.
39
Section 54.9802-4(d)(2)(v).

Bulletin No. 2019–42 967 October 15, 2019
application of any change in residence, or
a rule similar to one of those alternatives
would be helpful to employers, or whether
the availability of the location safe harbor,
in conjunction with the final integration
regulations, generally eliminates the need
for such rules. Similar to the location safe
harbor, any residence safe harbor would
need to include rules providing when a
change in an employee’s residence must
be taken into account.
d. Multiple Affordability Plans in One
Rating Area
Although the final PTC regulations re-
fer to the lowest cost silver plan offered
through an Exchange for an employee in
a rating area, there is not necessarily one
lowest cost silver plan per rating area.
Rather, CMS has advised the Treasury
Department and the IRS that, in some rat-
ing areas, there are different lowest cost
silver plans in different parts of the rating
area because some issuers only offer cov-
erage in parts of rating areas (specifically,
by county or zip code). For purposes of
the PTC, whether an offer of an individ-
ual coverage HRA to an employee is af-
fordable depends, in part, on the premium
for the lowest cost silver plan available to
that employee, which may differ from the
lowest cost silver plan available to anoth-
er employee located in another part of the
same rating area.
For the sake of clarity, the proposed
regulations, therefore, provide that the
lowest cost silver plan for an employee
for a month, for purposes of the safe har-
bors in the proposed regulations, is the
lowest cost silver plan in the part of the
rating area that includes the employee’s
applicable location. For purposes of this
preamble and the proposed regulations,
an employee’s applicable location is ei-
ther the employee’s primary worksite, if
the employer uses the location safe har-
bor, or the employee’s residence, if the
employer chooses not to use the location
safe harbor.
ALEs should be aware of how this
rule interacts with the final integration
regulations. Specifically, for an ALE us-
ing the location safe harbor with multiple
worksites within a rating area, it may be
the case that for some employees one low-
est cost silver plan applies and for other
employees, with a worksite in another part
of the same rating area, a different low-
est cost silver plan applies, perhaps with
substantially different premiums. In that
sense, the amount the employer needs
to make available under the individual
coverage HRA, for purposes of avoid-
ing potential liability for an employer
shared responsibility payment under sec-
tion 4980H(b), may vary by zip code or
county, rather than by rating area. Howev-
er, under the final integration regulations,
employers may not create classes of em-
ployees based on a geographic area small-
er than a rating area.
40
Accordingly, to the
extent an ALE has multiple worksites in
one rating area, the ALE will need to take
these different rules into account in deter-
mining the amounts to be made available
under an individual coverage HRA, and,
in order to avoid potential liability for an
employer shared responsibility payment
under section 4980H(b), may need to base
amounts made available in the HRA in a
rating area on the most expensive lowest
cost silver plan in any part of the rating
area in which at least one employee has a
primary worksite.
2. Age-Related Issues
a. Consideration of Age Safe Harbor
Under the final PTC regulations, for
any given employee, the premium for the
PTC affordability plan is based on the par-
ticular employee’s relevant circumstances,
including the particular employee’s age.
Consequently, even for employees resid-
ing in the same location (or working at the
same location if the location safe harbor is
applied), the cost of the applicable afford-
ability plan is determined on an employ-
ee-by-employee basis.
41
In Notice 2018-
88, the Treasury Department and the IRS
acknowledged that determining the pre-
mium for the affordability plan for each
employee based on his or her age might
be burdensome for some employers, and
requested comments on the administrative
issues and burdens the age-based determi-
nation may raise and on safe harbors that
would ease this burden and be consistent
with the purpose and policies underlying
section 4980H.
One commenter supported an employ-
ee-by-employee age-based affordability
determination and, therefore, opposed an
age-based safe harbor, asserting that em-
ployers will want to make HRA contribu-
tions based on employee ages. Therefore,
the commenter did not see the need for
an age-based safe harbor. However, sev-
eral commenters stated that requiring the
determination of affordability on an em-
ployee-by-employee basis, based on age,
would be very burdensome for employers.
These commenters requested an age-based
safe harbor and indicated that the lack of
such a safe harbor could discourage some
larger employers from offering individual
coverage HRAs, in particular for employ-
ers that want to provide a flat amount in
the individual coverage HRA regardless
of age.
Commenters provided various sug-
gestions for how an age-based safe har-
bor could be designed. One commenter
suggested that the safe harbor might pro-
vide that affordability may be determined
based on a composite premium for an
employer’s employees, at a minimum,
at a particular worksite, and preferably
at a combination of regional or national
worksites. The commenter also suggested
a composite premium based on the low-
est cost silver plan at a specified age (for
example, the lowest cost silver plan for a
40-year-old person in the rating area of the
worksite), which an employer could use to
determine the cost of the affordability plan
for all of its employees at the particular
worksite. Another commenter suggested
40
Section 54.9802-4(d)(2)(v).
41
Also note that, under the final integration regulations, a plan sponsor of an individual coverage HRA may increase amounts made available under the HRA based on increases in the ages of
participants in a class of employees subject to certain conditions. See §54.9804-2(c)(3). Nothing in the proposed regulations affects the rules allowing plan sponsors of individual coverage
HRAs to vary amounts made available based on participants’ ages. However, ALEs that offer individual coverage HRAs will need to take into account both the final integration regulations
and section 4980H in designing an individual coverage HRA offered to full-time employees.

October 15, 2019 968 Bulletin No. 2019–42
employers should be allowed to use the
average age of all employees in each class
of employees on the first day of the plan
year to determine the premium for the sec-
tion 4980H affordability calculation for all
employees in that class of employees. One
commenter suggested an age safe harbor
could be based on age bands adopted in
a state, while another commented that the
use of age bands to develop a safe harbor
would introduce too much complexity and
variation.
The Treasury Department and the IRS
acknowledge that determining the premi-
um for the affordability plan for purposes
of section 4980H for each full-time em-
ployee, based on age, may be burden-
some for some employers. However, sec-
tion 4980H incorporates section 36B for
purposes of determining whether an ALE
is subject to an employer shared respon-
sibility payment under section 4980H(b),
and the authority of the Treasury Depart-
ment and the IRS to provide safe harbors
under section 4980H that deviate signifi-
cantly from the section 36B rules is lim-
ited. More specifically, as noted earlier in
this preamble, the Treasury Department
and the IRS have provided other sec-
tion 4980H safe harbors, namely the HHI
safe harbors, which have been designed to
offer a reasonable proxy for information
that the employer may not know or would
bear significant burdens in determining.
By contrast, an employer typically knows
the ages of its employees for a variety of
unrelated purposes; consequently, it is not
the case that employers do not know, or
would bear a significant burden in deter-
mining, an employee’s age. In addition,
the average age of a group of employees
generally will not be a reasonable proxy
for a particular employee’s age because,
depending on the group, the average age
may differ markedly from the ages of the
older and younger members of the group.
Accordingly, any age-based safe harbor
would likely result in a number of em-
ployees (those with an age greater than
the safe harbor age) receiving the PTC
while the employer would not be subject
to an employer shared responsibility pay-
ment under section 4980H(b), including
in some cases by employer design.
For these reasons, the proposed reg-
ulations do not provide a safe harbor for
the age used to determine the premium of
an employee’s affordability plan. Rather,
under the proposed regulations as under
section 36B, affordability of the offer of
an individual coverage HRA for purposes
of section 4980H is determined, in part,
based on each employee’s age.
The Treasury Department and the IRS
also note that as a practical matter, if an
employer wants to make a single amount
available under an individual coverage
HRA to a class of employees and ensure it
avoids an employer shared responsibility
payment under section 4980H(b), in gen-
eral, the employer can use the age of the
oldest employee in the class of employees
to determine the amount to make available
under the HRA to that class of employees.
However, if the employer does not make
available the full amount of the cost of the
affordability plan under the HRA, the em-
ployer will also need to compare each full-
time employee’s required contribution to
the applicable amount under an HHI safe
harbor to ensure the offer is affordable for
all full-time employees. Further, the em-
ployer would need to take into account
any geographic variation in the cost of the
affordability plan (that is, the employer
would need to ensure that it is basing af-
fordability on the most expensive lowest
cost silver plan available to any employee
in the class, which may not be the lowest
cost silver plan for the oldest employee in
the class depending on whether the lowest
cost silver plan of a younger employee in
the class in a different geographic location
has a higher cost).
b. Age Used to Determine Premium for
Affordability Plan for an Employee
One commenter requested information
regarding when employers may determine
the employee’s age for purposes of deter-
mining the premium of the affordability
plan, for purposes of section 4980H. To
align with the rules issued under 45 CFR
147.102(a)(1)(iii) concerning the abili-
ty of issuers in the individual and small
group markets to vary health insurance
premiums based on age, the commenter
requested that the Treasury Department
and the IRS provide that an employee’s
age may be determined at the time of the
policy issuance or renewal or, if an indi-
vidual is added after the policy issuance
or renewal date, the date the individual is
added or enrolled in coverage.
42
In response to this comment, and to
provide clarity to employers, the proposed
regulations specify the date as of which
an employee’s age is to be determined
for a plan year for purposes of determin-
ing affordability under the section 4980H
safe harbors.
43
Specifically, the proposed
regulations provide that for an employee
who is or will be eligible for an individual
coverage HRA on the first day of the plan
year, the employee’s age for the plan year
is the employee’s age on the first day of
the plan year, and for an employee who
becomes eligible for an individual cov-
erage HRA during the plan year, the em-
ployee’s age for the remainder of the plan
year is the employee’s age on the date the
HRA can first become effective for the
employee. This rule is based on, but not
an exact incorporation of, the age deter-
mination rule that applies for purposes
of rate setting in the individual and small
group markets, which is tied to the indi-
vidual market policy issuance or renewal
date. The proposed regulations include a
rule based on the HRA plan year and HRA
effective date instead, to provide more
certainty and simplicity for employers.
c. Age Band Used to Identify
Affordability Plan for All Employees
The Treasury Department and the IRS
understand that, in almost all cases, the
plan that is the lowest cost silver plan at
42
Under 45 CFR 147.102(a)(1)(iii), issuers are required to use the enrollee’s age as of the date of policy issuance or renewal.
43
The age identification rule in the proposed regulations does not apply for purposes of the final integration regulations, under which, in determining age with respect to variation in amounts
made available to participants based on age in an individual coverage HRA, plan sponsors may determine the age of the participant using any reasonable method for a plan year, so long as the
plan sponsor determines each participant’s age using the same method for all participants in the class of employees for the plan year and the method is determined prior to the plan year. See
§54.9802-4(c)(3)(iii)(B). However, to the extent an ALE is offering an individual coverage HRA, the ALE will need to take into account both the final integration regulations and any rules
under section 4980H; therefore, the Treasury Department and the IRS have provided a proposed rule under section 4980H that allows compliance with both sets of rules.

Bulletin No. 2019–42 969 October 15, 2019
one age in a particular location will be the
lowest cost silver plan for individuals of
all ages in that location. However, CMS
has advised the Treasury Department and
the IRS that it is theoretically possible
that, in some cases, one plan might be the
lowest cost silver plan at one age and an-
other plan might be the lowest cost silver
plan at another age, in the same location.
If that were to occur, however, the differ-
ences in premium amounts of the different
plans at the same age would be extremely
small (less than two dollars).
Therefore, in order to avoid the need
for employers to determine different low-
est cost silver plans in one location for
employees of different ages, and to sim-
plify the information that the Exchanges
will make available to employers, the pro-
posed regulations provide that for purpos-
es of the proposed safe harbors, the low-
est cost silver plan for an employee for a
month is the lowest cost silver plan for the
lowest age band in the individual market
for the employee’s applicable location.
3. Look-back Month Safe Harbor
a. In General
Under the final PTC regulations, the
affordability of an individual coverage
HRA for a month is determined, in part,
based on the cost of the PTC affordabil-
ity plan for that month. For example, an
employee’s required contribution for
January 2020 for an individual coverage
HRA would be based on the cost of the
PTC affordability plan for January 2020.
Further, Exchange plan premium infor-
mation for a calendar year generally is
not available until shortly before the be-
ginning of the open enrollment period for
that calendar year, which generally be-
gins on November 1 of the prior calendar
year.
44
In Notice 2018-88, the Treasury
Department and the IRS noted that while
this time frame is sufficient for individu-
als and Exchanges to determine potential
PTC eligibility for the upcoming calendar
year, the Treasury Department and the
IRS are aware that employers generally
determine the health benefits they will of-
fer for an upcoming plan year (including
the employees’ required contributions)
well in advance of the start of the plan
year. Therefore, for an individual cover-
age HRA with a calendar-year plan year,
employers generally would determine the
benefits to offer, including the amount to
make available in an HRA for the plan
year, well before mid-to-late fall of the
prior calendar year. Further, the Treasury
Department and the IRS noted that under
section 4980H, ALEs are intended to be
able to decide whether to offer coverage
sufficient to avoid an employer shared re-
sponsibility payment. ALEs are only able
to make that choice if they have timely ac-
cess to the necessary information.
To address this issue, Notice 2018-88
provided that the Treasury Department
and the IRS anticipated issuing guidance
that would allow an ALE sponsoring an
individual coverage HRA with a calen-
dar-year plan year to determine affordabil-
ity for a year using the cost of the afford-
ability plan for the employee’s applicable
location for the prior calendar year.
45
A number of commenters supported
this safe harbor, asserting that it would be
problematic for employers to be required
to wait until the fall to determine individu-
al coverage HRA amounts for the upcom-
ing year. However, one commenter op-
posed the safe harbor, based on concerns
that, according to the commenter, the sig-
nificant volatility in premiums in the in-
dividual market from year to year could
impose additional costs on employees be-
cause individual coverage HRA amounts
would be based on prior year individual
market premiums and would not reflect
current year individual market premiums.
The Treasury Department and the IRS
acknowledge that premiums in the indi-
vidual market may vary from year to year
and that a safe harbor based on prior pre-
mium information would allow ALEs to
determine affordability based on premi-
ums that likely will differ from the actual
current year premiums. However, under
section 4980H, ALEs are intended to be
able to decide whether to offer coverage
sufficient to avoid an employer shared re-
sponsibility payment, and they may only
do so if they have timely access to the
relevant information. Therefore, the pro-
posed regulations include a safe harbor
that allows employers to use prior premi-
um information to determine affordability
for purposes of section 4980H (the look-
back month safe harbor), but with some
modifications as compared to the antic-
ipated safe harbor in Notice 2018-88, as
described in the remainder of this section
of the preamble.
As anticipated in Notice 2018-88, un-
der the proposed regulations, an employer
offering an individual coverage HRA with
a calendar-year plan year may use the
look-back month safe harbor. However,
the proposed regulations provide addi-
tional specificity, to take into account that
even within a calendar year, from calendar
month to calendar month, the lowest cost
silver plan in an employee’s applicable
location may change due to plan termina-
tion or because the plan that was the low-
est cost silver plan closes to enrollment
(sometimes referred to as plan suppres-
sion). Therefore, the proposed regulations
provide that in determining an employee’s
required contribution for any calendar
month, for purposes of section 4980H(b),
an employer offering an individual cover-
age HRA with a calendar-year plan year
may use the monthly premium for the
lowest cost silver plan for January of the
prior calendar year.
In addition, the proposed regulations
provide that employers offering individu-
al coverage HRAs with non-calendar year
plan years (non-calendar year individual
coverage HRAs) may also use the look-
back month safe harbor, although in that
case the look-back month is different. In
this respect, the proposed regulations dif-
fer from Notice 2018-88, which provided
that the Treasury Department and the IRS
did not anticipate allowing employers of-
fering non-calendar year individual cover-
age HRAs to use this safe harbor. Howev-
er, the rule anticipated in Notice 2018-88
was based on the assumption that employ-
ers offering non-calendar year individual
coverage HRAs would have the relevant
premium information by November of the
prior calendar year. The Treasury Depart-
44
See 45 CFR 155.410(e)(3).
45
This safe harbor was referred to in Notice 2018-88 as the calendar year safe harbor.

October 15, 2019 970 Bulletin No. 2019–42
ment and the IRS now understand that this
would not necessarily be the case as the
affordability plan may change from month
to month during the calendar year; thus,
which plan is the affordability plan for a
month generally will not be known until
shortly before the relevant month.
Further, in Notice 2018-88, the Trea-
sury Department and the IRS requested
comments on whether this safe harbor
should be allowed to be used by employ-
ers that offer non-calendar year individ-
ual coverage HRAs and, if so, the range
of plan year start dates to which the safe
harbor should apply. Some commenters
requested that the safe harbor extend to
non-calendar year individual coverage
HRAs. One commenter recommended
allowing, as a general rule, all employers
with an individual coverage HRA to use
the premiums for the affordability plan
in effect six months prior to the first day
of the plan year. Another commenter rec-
ommended allowing, as a general rule,
all employers with individual coverage
HRAs to use the premiums for the afford-
ability plan in effect or published no lon-
ger than 12 months prior to the start of the
plan year.
Based on these comments and that the
affordability plan may change from month
to month during the year and, therefore,
may not be known by November of the
prior year, the proposed regulations al-
low employers offering non-calendar
year individual coverage HRAs to use
the look-back month safe harbor, in order
to provide those employers timely access
to the information they need to determine
the coverage sufficient to avoid an em-
ployer shared responsibility payment, as
contemplated by section 4980H(b). More
specifically, for an employer offering a
non-calendar year individual coverage
HRA, the proposed regulations provide
that in determining an employee’s re-
quired contribution for a calendar month,
for purposes of section 4980H(b), an
employer may use the monthly premium
for the affordability plan for January of
the current calendar year. The proposed
regulations provide a different look-back
month for employers offering non-calen-
dar year individual coverage HRAs (that
is, January of the current year) than those
offering individual coverage HRAs with
a calendar-year plan year (that is, Janu-
ary of the prior year) in order to strike
the appropriate balance between provid-
ing employers with access to information
sufficiently in advance of the plan year
and avoiding the use of premium infor-
mation that could be significantly out of
date. The Treasury Department and the
IRS note that the relevant premium infor-
mation for non-calendar year individual
coverage HRAs (that is, the premium for
January of the current year) will be avail-
able by November 1 of the prior year,
and, therefore, generally ALEs sponsor-
ing non-calendar year individual cover-
age HRAs should have access to the nec-
essary premium information sufficiently
in advance of the start of the plan year.
The Treasury Department and the IRS re-
quest comments on whether the proposed
look-back month for non-calendar year
individual coverage HRAs will be suffi-
cient for individual coverage HRAs with
plan years that begin relatively early in
the calendar year and whether ALEs in-
tend to offer individual coverage HRAs
on a non-calendar year basis, including
with plan years that begin early in the
calendar year.
The proposed regulations provide that
an ALE may use the look-back month safe
harbor in addition to the other safe har-
bors included in the proposed regulations,
and that an ALE may apply the look-back
month safe harbor even if the ALE decides
not to use the location safe harbor and, in-
stead, bases the affordability plan on em-
ployee residence.
The proposed regulations also clarify
that, although the look-back month safe
harbor allows the employer to use pre-
mium information from the applicable
look-back month to determine the cost of
the affordability plan for each month of
the current plan year, in determining the
applicable premium, the employer must
use the employee’s applicable age for the
current plan year and the employee’s ap-
plicable location for the current month.
In general, this means that the ALE may
use the same premium (that is, the pre-
mium based on the applicable look-back
month, applying current employee infor-
mation) for each month of the plan year.
However, to the extent the employee’s
applicable location changes during the
plan year, although the ALE may con-
tinue to determine the monthly premi-
um for the applicable lowest cost silver
plan based on the applicable look-back
month, the ALE must use the employee’s
new applicable location to determine that
monthly premium. See parts II(A)(1)(b)
and II(A)(2)(b) of this preamble for a
discussion of the date as of which an em-
ployee’s age is determined for purposes
of the section 4980H safe harbors and the
date as of which an employee’s worksite
is considered to have changed, for pur-
poses of the location safe harbor.
Relatedly, Notice 2018-88 also in-
cluded an anticipated safe harbor which
allowed ALEs offering individual cover-
age HRAs to assume that the cost of the
affordability plan for the first month of the
plan year is the cost of the affordability
plan for all months of the plan year (the
non-calendar year safe harbor). This safe
harbor was primarily intended to provide
certainty to non-calendar year individual
coverage HRAs, for which the cost of the
affordability plan would change mid-plan
year (that is, upon the changing of the cal-
endar year). Commenters supported the
non-calendar year safe harbor, and the
Treasury Department and the IRS contin-
ue to be of the view that ALEs need pre-
dictability with respect to the affordability
plan that will apply for each month of the
plan year. However, the proposed regula-
tions do not include the non-calendar year
safe harbor because it is generally sub-
sumed by the look-back month safe har-
bor under the proposed regulations. Spe-
cifically, under the proposed regulations,
the look-back month safe harbor applies
to non-calendar year individual coverage
HRAs and provides a look-back month to
determine the cost of the affordability plan
for each month of the plan year. As a re-
sult, the look-back month safe harbor ad-
dresses the issue underlying the non-cal-
endar year safe harbor, and the Treasury
Department and the IRS determined that
a separate non-calendar year safe harbor
would be largely duplicative and confus-
ing. However, the Treasury Department
and the IRS request comments on wheth-
er any employers do not intend to use the
look-back month safe harbor and would,
therefore, need a separate safe harbor
allowing the use of the premium for the
first month of the current plan year to de-
termine affordability for all months of the
plan year.

Bulletin No. 2019–42 971 October 15, 2019
b. Adjustment to Look-back Month
Premium Amounts
Notice 2018-88 noted that the Trea-
sury Department and the IRS considered
whether to apply an adjustment to the cost
of the affordability plan under the look-
back month safe harbor, but did not an-
ticipate proposing such an adjustment, to
avoid complexity and due to uncertainty
regarding how to determine an appropriate
adjustment in all circumstances and for all
years. The Treasury Department and the
IRS requested comments on whether such
an adjustment should be included in future
guidance and, if so, how the adjustment
should be calculated.
A number of commenters opposed ap-
plying an adjustment, asserting that, be-
cause of volatility in healthcare costs, it
would be difficult to develop a benchmark
that is representative of the market, and an
adjustment could contribute to increasing
healthcare costs, further complicate an al-
ready complicated rule, and cause confu-
sion for employers. In contrast, a number
of commenters supported an adjustment,
suggesting that without an adjustment an
employee with an individual coverage
HRA may be priced out of the market and
employer contributions required to satisfy
section 4980H would be systematically
undervalued.
Regarding the method for calculating
an adjustment, commenters suggested
basing the adjustment on the average of
the three prior years’ premium increas-
es in the relevant individual market or
PPACA’s premium adjustment percent-
age. Commenters requested that the Trea-
sury Department and the IRS work with
HHS to compute these amounts and make
them available to plan sponsors in a timely
manner.
The Treasury Department and the
IRS have considered these comments
and continue to be concerned about the
complexity and burdens that would be
imposed by the application of an adjust-
ment to the prior premiums under the
look-back month safe harbor, and agree
with commenters regarding the difficul-
ty of producing an accurate adjustment.
The Treasury Department and the IRS are
concerned about the ability to produce a
sufficiently accurate adjustment due to
geographic variation in premiums (in-
cluding geographic variations in the rela-
tive annual increases or decreases in pre-
miums) and that the timing of access to
information would hamper the ability to
apply an adjustment based on up-to-date
information. The Treasury Department
and the IRS also considered applying
more general adjustments (such as the
Consumer Price Index overall medical
care component or PPACA’s premium
adjustment percentage
46
) but are con-
cerned that those adjustments would add
complexity to the safe harbor while not
reflecting premium changes in a way that
is sufficiently specific to the employer’s
employees, including their geographic
location. Therefore, under the proposed
regulations, the look-back month safe
harbor does not include an adjustment to
the prior premium information. Howev-
er, the Treasury Department and the IRS
request comments on this issue and will
continue to consider whether an adjust-
ment is warranted, and how any such ad-
justment would be calculated, including
in the event that the Treasury Department
and the IRS observe that use of the look-
back month safe harbor results in signif-
icant discrepancies in the affordability
determinations as separately applied for
purposes of sections 36B and 4980H.
4. Consistency Requirement and
Conditions for the Safe Harbors
Notice 2018-88 provided that ALEs
would not be required to use any of the
anticipated section 4980H safe harbors
for individual coverage HRAs, but that
the Treasury Department and the IRS an-
ticipated that some level of consistency
would be required in the application of
the anticipated safe harbors by an em-
ployer to its employees. The notice re-
quested comments on the scope of such a
requirement, including whether employ-
ers should be allowed to choose to apply
the safe harbors to reasonable categories
of employees, such as some or all of the
categories identified in §54.4980H-5(e)
(2)(i), which apply for purposes of the
HHI safe harbors.
47
One commenter sup-
ported the use of consistency require-
ments based on the current categories of
employees used under §54.4980H-5(e)
(2)(i).
Under the proposed regulations, use of
any of the safe harbors is optional for an
ALE. However, rather than providing that
a consistency requirement applies based
on reasonable categories of employees
as set forth in §54.4980H-5(e)(2)(i), the
proposed regulations provide that an ALE
may choose to apply the safe harbors for
any class of employees as defined in the
final integration regulations,
48
provided
the ALE does so on a uniform and con-
sistent basis for all employees in the class.
The proposed regulations base the con-
sistency requirement for the safe harbors
in the proposed regulations on the classes
of employees in the final integration reg-
ulations for the sake of consistency with
those rules and to reduce complexity for
employers in complying with both sets of
rules.
In addition, the proposed regulations
clarify the conditions for using the pro-
posed safe harbors, including the HHI safe
harbors as applied to offers of individual
coverage HRAs. Current regulations un-
der section 4980H provide that an ALE
may only use an HHI safe harbor if the
ALE offers its full-time employees (and
their dependents) eligible employer-spon-
sored coverage that provides MV with
respect to the self-only coverage offered
to the employee. Because an individual
coverage HRA is deemed to provide MV
by virtue of being affordable (and is not
an independent determination as it is for
other types of employer-sponsored cover-
age), the proposed regulations do not sep-
arately impose this MV requirement on
the use of the safe harbors in the proposed
regulations.
46
See PPACA section 1302(c)(4).
47
Under §54.4980H-5(e)(2)(i), reasonable categories generally include specified job categories, the nature of compensation (hourly or salary), geographic location, and similar bona fide
business criteria.
48
Section 54.9802-4(d)(2). The proposed regulations refer to the definition of classes of employees in the final integration regulations but do not incorporate other related rules, such as the
minimum class size requirement set forth in §54.9802-4(d)(3).

October 15, 2019 972 Bulletin No. 2019–42
5. Application of Current HHI Safe
Harbors to Individual Coverage HRAs
As described earlier in this pream-
ble, under section 36B, whether an offer
of coverage under an eligible employ-
er-sponsored plan is affordable is based on
whether the employee’s required contribu-
tion exceeds the required contribution per-
centage of the employee’s household in-
come. Because an ALE generally will not
know an employee’s household income,
the current section 4980H regulations set
forth three HHI safe harbors under which
an employer may compare the employee’s
required contribution to information that
is readily available to the employer, rather
than to actual household income.
49
Notice 2018-88 provided that the Trea-
sury Department and the IRS anticipate
providing guidance clarifying that an ALE
that offers an individual coverage HRA
would be permitted to use the HHI safe
harbors, subject to the applicable require-
ments, for purposes of section 4980H(b).
Several commenters supported the intent
to allow the use of the HHI safe harbors to
determine the affordability of individual
coverage HRAs.
As with other types of employer-spon-
sored coverage, employers that offer indi-
vidual coverage HRAs will not know em-
ployees’ household incomes. Therefore,
the proposed regulations provide that an
employer offering an individual coverage
HRA to a class of employees may use the
HHI safe harbors in determining whether
the offer of the HRA is affordable for pur-
poses of section 4980H(b).
The proposed regulations clarify how
the HHI safe harbors apply to an offer of
an individual coverage HRA. Specifically,
the current HHI safe harbors assume that
the employee’s required contribution will
be based on the lowest-cost self-only cov-
erage that provides MV that the employer
offers to the employee. The proposed reg-
ulations clarify that, in applying the HHI
safe harbors to an offer of an individual
coverage HRA, the employee’s required
HRA contribution is to be used, taking
into account any other applicable safe har-
bors under the proposed regulations.
Further, the proposed regulations in-
clude technical updates to the current HHI
safe harbors to reflect that the percentage
used to determine affordability is the re-
quired contribution percentage (rather
than a static 9.5 percent), which is adjust-
ed in accordance with section 36B(c)(2)
(C)(iv) and the regulations thereunder.
The Treasury Department and the IRS
clarified this issue in Notice 2015-87 and
now have the opportunity to reflect that
clarification in the regulation text.
50
The
proposed regulations do not make sub-
stantive changes to the current HHI safe
harbors as applied to employer-spon-
sored coverage that is not an individual
coverage HRA.
51
6. Minimum Value
As described earlier in this preamble,
in general, under section 36B, an eligible
employer-sponsored plan provides MV if
the plan’s share of the total allowed costs
of benefits provided under the plan is at
least 60 percent of the costs and if the plan
provides substantial coverage of inpatient
hospitalization and physician services.
52

Because of the differences between in-
dividual coverage HRAs and traditional
group health plans, the final PTC regula-
tions provide that an individual coverage
HRA that is affordable is treated as pro-
viding MV.
53
Notice 2018-88 explained that the MV
definition under the proposed PTC regu-
lations would apply for purposes of de-
termining whether an ALE that offers an
individual coverage HRA has made an
offer that provides MV for purposes of
section 4980H. Therefore, an individual
coverage HRA that is affordable (taking
into account any affordability safe har-
bors) would be treated as providing MV
for purposes of section 4980H.
One commenter supported the MV
rules for individual coverage HRAs, and
one commenter opposed the rules, sug-
gesting that any metal level plan should be
allowed to be used to determine if an offer
provides MV (rather than looking to the
lowest cost silver plan). Some comment-
ers suggested the use of a different metal
level plan in determining affordability and
MV for individual coverage HRAs more
generally. The Treasury Department and
the IRS considered these issues in con-
nection with the final PTC regulations and
addressed comments on these topics in the
preamble to the final PTC regulations.
54

Further, section 4908H applies the MV
standard by reference to section 36B, and
no basis has been provided for applying
a different standard under section 4980H.
Therefore, under the proposed regula-
tions, an individual coverage HRA that is
affordable (as determined under the appli-
cable section 36B rules, in combination
with any applicable section 4980H safe
harbors), is deemed to provide MV.
7. Reporting under Sections 6055 and
6056
a. Section 6056
Section 6056 requires ALEs to file with
the IRS and furnish to full-time employees
information about whether the employer
offers coverage to full-time employees
and, if so, information about the coverage
offered. An ALE that offers an individual
coverage HRA to its full-time employees,
just like all ALEs, is required to satisfy
the section 6056 reporting requirements.
ALEs use Form 1094-C, “Transmittal of
Employer-Provided Health Insurance Of-
fer and Coverage Information Returns,”
and Form 1095-C, “Employer-Provided
Health Insurance Offer and Coverage,” to
satisfy the section 6056 reporting require-
ments.
Section 6056 and Form 1095-C require
ALEs to report each full-time employee’s
49
See §54.4980H-5(e)(2).
50
See Notice 2015-87, 2015-52 IRB 889, Q&A 12. In Notice 2015-87, the Treasury Department and the IRS clarified a number of issues related to section 4980H. The proposed regulations
do not affect the guidance provided in that notice, which remains in effect. See also 81 FR 91755, 91758 (Dec. 19, 2016).
51
The proposed regulations also provide technical updates to §54.4980H-4(b), regarding mandatory offers of coverage, where the use of 9.5 percent needed to be updated to refer instead to
the required contribution percentage. The updates incorporate the clarification provided in Notice 2015-87, Q&A 12 and are not substantive changes.
52
See section 36B(c)(2)(C)(ii); see also 80 FR 52678 (Sept. 1, 2015).
53
See §1.36B-2(c)(3)(i)(B).
54
See 84 FR 28888 (June 20, 2019), 28943-28946.

Bulletin No. 2019–42 973 October 15, 2019
required contribution.
55
Notice 2018-88
provided that the Treasury Department
and the IRS anticipated that an ALE would
not be required to report the employee’s
required contribution that is calculated
under the proposed PTC regulations. An
ALE would, instead, be required to report
the employee’s required contribution de-
termined under the applicable safe harbors
that were anticipated to be provided with
respect to the calculation of an employee’s
required contribution for an individual
coverage HRA under section 4980H. No-
tice 2018-88 also stated that the Treasury
Department and the IRS were continuing
to consider the application of section 6056
to an ALE that offers an individual cover-
age HRA and were anticipating providing
additional guidance on these issues.
One commenter requested new report-
ing guidance as soon as possible. Another
commenter requested that any new re-
porting guidance be provided at least 12
months prior to the effective date of any
changes in reporting and asked the Trea-
sury Department and the IRS to consider
whether good faith reporting relief would
be warranted. Some commenters urged
the Treasury Department and the IRS to
simplify and minimize section 6056 re-
porting generally and with respect to indi-
vidual coverage HRAs.
The proposed regulations do not pro-
pose to amend the regulations under sec-
tion 6056. It is anticipated that guidance
regarding reporting in connection with in-
dividual coverage HRAs will be provided
in other administrative guidance, includ-
ing forms and instructions. It is also antic-
ipated that the guidance would permit the
reporting of the employee’s required con-
tribution based on the section 4980H safe
harbor(s) used by the ALE, rather than
the employee’s required contribution de-
termined under the final PTC regulations
without application of the relevant safe
harbors. The Treasury Department and the
IRS continue to consider whether and how
to revise the codes used in Form 1095-C
reporting to account for the new individu-
al coverage HRA safe harbors. The Trea-
sury Department and the IRS recognize
the need for timely guidance in this area
to assist taxpayers, plan administrators,
and software developers to prepare for the
reporting associated with individual cov-
erage HRAs.
b. Section 6055
Section 6055 provides that all persons
who provide MEC to an individual must
report certain information to the IRS that
identifies covered individuals and the pe-
riod of coverage, and must furnish a state-
ment to the covered individuals including
the same information. Information returns
under section 6055 generally are filed
using Form 1095-B, “Health Coverage.”
However, self-insured ALEs are required
to file Form 1095-C and use Part III of that
form, rather than Form 1095-B, to report
information required under section 6055.
Individual coverage HRAs are group
health plans and, therefore, are eligible
employer-sponsored plans that are MEC.
Accordingly, reporting under section 6055
is required for individual coverage HRAs.
In general, the employer is the entity re-
sponsible for this reporting.
56
The Treasury Department and the
IRS note that there are regulations under
§1.6055-1(d) that provide exceptions for
certain plans from the section 6055 re-
porting requirements.
57
These regulations
include exceptions for certain duplicative
coverage or supplemental coverage pro-
viding MEC. More specifically, the regu-
lations provide that: (1) if an individual is
covered by more than one MEC plan or
program provided by the same reporting
entity, reporting is required for only one
of the plans or programs; and (2) reporting
is not required for an individual’s MEC to
the extent that the individual is eligible
for that coverage only if the individual
is also covered by other MEC for which
section 6055 reporting is required, but for
eligible employer-sponsored coverage this
exception only applies if the supplemental
coverage is offered by the same employ-
er that offers the eligible employer-spon-
sored coverage for which section 6055
reporting is required.
58
Although an indi-
vidual enrolled in an individual coverage
HRA is required to be enrolled in individ-
ual health insurance coverage, Medicare
Part A and B, or Medicare Part C, the em-
ployer providing the individual coverage
HRA generally is not the same entity that
provides the individual health insurance
coverage. Accordingly, these section 6055
exceptions generally do not apply to indi-
vidual coverage HRAs.
The proposed regulations do not pro-
pose to amend the regulations under sec-
tion 6055. However, the Treasury Depart-
ment and the IRS note that because the
individual shared responsibility payment
under section 5000A was reduced to zero
for months beginning after December 31,
2018, the Treasury Department and the
IRS are studying whether and how the re-
porting requirements under section 6055
should change, if at all, for future years.
8. Application of Tobacco Surcharge
and Wellness Incentives to Affordability
Determination
One commenter noted that whether an
individual is a tobacco user can have an
impact on premiums for individual health
insurance coverage. This commenter re-
quested that the Treasury Department
and the IRS permit employers to use the
non-tobacco rate in determining afford-
ability for purposes of the PTC and sec-
tion 4980H.
In response, and consistent with cur-
rent related guidance,
59
the final PTC
regulations provide that for purposes of
determining the premium for the lowest
cost silver plan used to determine the em-
ployee’s required HRA contribution: (1)
if the premium differs for tobacco users
and non-tobacco users, the premium taken
into account is the premium that applies to
non-tobacco users; and (2) the premium is
determined without regard to any wellness
55
See also §301.6056-1(d)(1)(vi).
56
Section 1.6055-1(c)(2).
57
See §1.6055-1(d)(2). See also Prop. Reg. §1.6055-1(d)(2) and (3), in 81 FR 50671 (Aug. 2, 2016) (these regulations may be relied upon for calendar years ending after December 31, 2013)
and Notice 2015-68, 2015-41 IRB 547.
58
Prop. Reg. §1.6055-1(d)(2) and (3). Id.
59
See §§1.36B-2(c)(3)(v)(A)(4) and 1.36B-3(e).

October 15, 2019 974 Bulletin No. 2019–42
program incentive that affects premiums
unless the wellness program incentive re-
lates exclusively to tobacco use, in which
case the incentive is treated as earned.
60

The proposed regulations incorporate
these rules by reference for purposes of
determining the affordability plan and the
associated premium.
9. Implementation of Section 4980H
Safe Harbors and Reliance on Exchange
Information
A number of commenters request-
ed that the Treasury Department and the
IRS ensure that employers have access
to the information needed to apply sec-
tion 4980H to individual coverage HRAs.
Some commenters asked for an online af-
fordability calculator and for lowest cost
silver plan data to be made available by
zip code, for each month, and to be re-
tained historically, for use by employers
and the IRS.
The Treasury Department and the IRS
recognize that access to location-specific
lowest cost silver plan premium data, on a
month-by-month basis, which is preserved
and includes prior year information, is
necessary for employers to use the safe
harbors included in the proposed regula-
tions. As noted in the preamble to the final
integration regulations, lowest cost silver
plan data will be made available by HHS
for employers in all states that use the
Federal HealthCare.gov platform to de-
termine whether the individual coverage
HRA offer is affordable for purposes of
section 4980H, and the Treasury Depart-
ment and the IRS are working with HHS
to ensure that the necessary information
is made available. With regard to states
that do not use the Federal HealthCare.
gov platform (State Exchanges), HHS has
begun discussing the information it plans
to make available in order to help the State
Exchanges prepare to make this informa-
tion available, and the Treasury Depart-
ment and the IRS also intend to work with
State Exchanges on this aspect of imple-
mentation.
Further, the Treasury Department and
the IRS recognize that employers are not
in a position to verify whether the low-
est cost silver plan premium information
posted by an Exchange for this purpose
has been properly computed and identi-
fied, and, therefore, employers will need
to be able to rely on the premium infor-
mation that Exchanges make available.
Accordingly, the proposed regulations
provide that ALEs may rely on the low-
est cost silver plan premium information
made available by an Exchange for pur-
poses of determining affordability under
section 4980H. Employers are encouraged
to retain relevant records.
61
10. Other Comments Related to
Section 4980H
One commenter requested clarification
that the offer of an individual coverage
HRA is an offer of coverage for purposes
of section 4980H, even if the individual
offered the individual coverage HRA does
not take the HRA or enroll in individu-
al health insurance coverage. To avoid an
employer shared responsibility payment,
section 4980H requires an ALE to offer its
full-time employees (and their dependents)
an opportunity to enroll in an eligible em-
ployer-sponsored plan. Section 4980H does
not require that the full-time employees (or
their dependents) actually enroll, in order
for the employer to avoid an employer
shared responsibility payment. Moreover,
as group health plans, individual coverage
HRAs are eligible employer-sponsored
plans. Therefore, the Treasury Depart-
ment and the IRS confirm, for the sake of
clarity, that the offer of an individual cov-
erage HRA is an offer of an eligible em-
ployer-sponsored plan for purposes of sec-
tion 4980H, without regard to whether the
employee accepts the offer. The proposed
regulations do not affect existing guidance
with respect to this issue.
One commenter requested clarifica-
tion that, for purposes of section 4980H,
an employer that offers an individual
coverage HRA will be treated as offer-
ing the HRA to Medicare-enrolled and
Medicare-eligible employees, even if
those employees are unable to obtain in-
dividual health insurance coverage on
account of their Medicare status. Under
section 4980H and the regulations there-
under, in general, an employer is consid-
ered to offer coverage to an employee if
the employee has an effective opportunity
to elect to enroll in coverage at least once
with respect to the plan year.
62
Whether
an employee has an effective opportuni-
ty to enroll is determined based on all the
relevant facts and circumstances. Further,
under the final integration regulations,
an individual coverage HRA may be in-
tegrated with Medicare Part A and B or
Medicare Part C; therefore, an employee
enrolled in Medicare may enroll in the
HRA, even though the employee may not
be able to obtain individual health insur-
ance coverage due to his or her status as a
Medicare enrollee.
63
Thus, if a particular
individual coverage HRA may be integrat-
ed with Medicare, the offer of the HRA to
an employee who is enrolled in Medicare
provides the employee an effective oppor-
tunity to enroll in the HRA and constitutes
an offer of coverage to the employee for
purposes of section 4980H. As a result, the
offer is taken into account in determining
if the ALE offered coverage to a sufficient
number of full-time employees (and their
dependents) for purposes of avoiding an
employer shared responsibility payment
under section 4980H(a). In addition, be-
cause an individual enrolled in Medicare
is not eligible for the PTC
64
and an ALE
will only be liable for an employer shared
responsibility payment for a month with
respect to a full-time employee under
section 4980H(b) if the full-time employ-
ee is allowed the PTC for that month, an
ALE will not be liable for an employer
shared responsibility payment under sec-
60
Section 1.36B-2(c)(5)(iii)(A). See 84 FR 28888 (June 20, 2019), 28496-28497.
61
The regulations under section 4980H do not include specific recordkeeping requirements; the otherwise generally applicable substantiation and recordkeeping requirements in section 6001
apply.
62
See §54.4980H-4(b)(1). The regulations also provide guidance on the circumstances in which an employer is considered to have made an offer of coverage even if the employee does not
have an effective opportunity to decline to enroll in the coverage.
63
See 84 FR 28888 (June 20, 2019), 28928-28931.
64
See section 36B(c)(2)(B) and §1.36B-2(a)(2).

Bulletin No. 2019–42 975 October 15, 2019
tion 4980H(b) for a month with respect to
a full-time employee enrolled in Medicare
for that month.
65
Some commenters inquired about the
interaction between section 4980H and
an offer of an excepted benefit HRA,
66

including the consequences to an ALE
if the excepted benefit HRA is used to
purchase short-term, limited-duration in-
surance (STLDI). Among other require-
ments, in order for an ALE to avoid an
employer shared responsibility payment,
it must offer an eligible employer-spon-
sored plan that is MEC to its full-time em-
ployees (and their dependents). Although
group health plans generally are eligible
employer-sponsored plans that are MEC,
excepted benefits are not MEC.
67
Conse-
quently, the offer of an excepted benefit
HRA is not treated as an offer of an eligi-
ble employer-sponsored plan that is MEC
for purposes of section 4980H, regardless
of whether the excepted benefit HRA is, or
may be, used to purchase STLDI.
However, in order for an HRA to be an
excepted benefit HRA, the employer must
offer the employees who are offered the
excepted benefit HRA other group health
plan coverage that is not limited to ex-
cepted benefits and that is not an HRA or
other account-based group health plan.
68

Because the other group health plan may
not be limited to excepted benefits, that
offer of coverage is an offer of an eligible
employer-sponsored plan that is MEC for
purposes of section 4980H. Whether the
offer of coverage under the other group
health plan in connection with the except-
ed benefit HRA is an affordable, MV offer
depends on the particular characteristics
of the group health plan and the coverage
offered under that plan. The proposed reg-
ulations do not affect existing guidance
with respect to this issue.
B. Proposed Regulations under
Section 105(h)
Under the final integration regulations,
employers may limit the offer of an indi-
vidual coverage HRA to certain classes
of employees and may vary the amounts,
terms, and conditions of individual cover-
age HRAs between the different classes
of employees.
69
Further, within any class
of employees offered an individual cov-
erage HRA, the employer must offer the
HRA on the same terms and conditions
to all employees in the class, subject to
certain exceptions (the same terms re-
quirement).
70
One of the exceptions to
the same terms requirement is that the
employer may increase the maximum dol-
lar amounts made available under an in-
dividual coverage HRA as the age of the
participant increases provided that (1) the
same maximum dollar amount attributable
to the increase in age is made available to
all participants in a class of employees
who are the same age, and (2) the max-
imum dollar amount made available to
the oldest participant(s) is not more than
three times the maximum dollar amount
made available to the youngest partici-
pant(s).
71
Other exceptions to the same
terms requirement include rules allowing
the employer to prorate amounts made
available for employees and dependents
who enroll in the HRA after the beginning
of the HRA plan year, to make available
carryover amounts, and for employees
with amounts remaining in other HRAs, to
make available those remaining amounts
in the current individual coverage HRA,
each subject to the conditions set forth in
the final integration regulations.
72
As explained earlier in this pream-
ble, HRAs, including individual cov-
erage HRAs, generally are subject to
section 105(h) and the regulations there-
under.
73
Further, the regulations under sec-
tion 105(h) provide that “any maximum
limit attributable to employer contribu-
tions must be uniform for all participants
and for all dependents of employees who
are participants and may not be modified
by reason of a participant’s age or years
of service.”
74
In Notice 2018-88, the Trea-
sury Department and the IRS explained
that varying the maximum amounts made
available under an individual coverage
HRA for different classes of employees
would conflict with the requirement in
§1.105-11(c)(3)(i) that any maximum
limit attributable to employer contribu-
tions must be uniform for all participants
and that, without further guidance, certain
amounts paid to an HCI under an indi-
vidual coverage HRA that implements an
age-based increase would be includible in
the income of the HCI because the HRA
would fail to satisfy the requirement in
§1.105-11(c)(3)(i) that prohibits the maxi-
mum limit attributable to employer contri-
butions to the HRA from being modified
by reason of a participant’s age.
To facilitate the offering of individual
coverage HRAs, Notice 2018-88 described
a potential safe harbor under which an in-
dividual coverage HRA would be treated
as not failing to satisfy the nondiscrimi-
nation requirement in §1.105-11(c)(3)(i)
that prohibits the maximum limit attribut-
able to employer contributions from being
modified by reason of a participant’s age.
Specifically, Notice 2018-88 described
a potential safe harbor under which the
HRA would be treated as not failing to
satisfy this requirement if it provided that
the maximum dollar amount made avail-
able to employees who are members of
a particular class of employees increases
in accordance with the increases in the
65
The rules under section 4980H for employees eligible for, but not enrolled in, Medicare apply as they do for non-Medicare-eligible employees. However, note that an individual eligible for
Medicare generally is ineligible for the PTC. See id.
66
See §54.9831-1(c)(3)(viii).
67
See section 5000A(f)(3).
68
See §54.9831-1(c)(3)(viii)(A).
69
See §54.9802-4(d).
70
See §54.9802-4(c)(3).
71
Section 54.9802-4(c)(3)(iii)(B). The proposed integration regulations included the same terms requirement, including the exception for age variation, but did not include the limit on the
extent to which amounts made available may be increased based on age, which was added to the final integration regulations in response to comments. See 84 FR 28888 (June 20, 2019),
28904-28907.
72
Section 54.9802-4(c)(3)(ii) and (v).
73
As noted earlier in this preamble, an HRA that, by its terms, only reimburses premiums for individual health insurance coverage is not subject to section 105(h) (see §1.105-11(b)(2)). Fur-
ther, section 105(h) and the regulations thereunder, including these proposed regulations, are only relevant to an individual coverage HRA offered to one or more HCIs and are not relevant
for an individual coverage HRA that is not offered to any HCI.
74
See §1.105-11(c)(3)(i).

October 15, 2019 976 Bulletin No. 2019–42
price of an individual health insurance
coverage policy in the relevant individu-
al insurance market based on the ages of
the employees who are members of that
class of employees, and further provided
that the same maximum dollar amount at-
tributable to the increase in age would be
made available to all employees who are
members of that class of employees who
are the same age. Notice 2018-88 also
stated that the Treasury Department and
the IRS anticipated that future guidance
would provide that an individual cover-
age HRA would be treated as not failing
to satisfy the more general requirement in
§1.105-11(c)(3)(i) that any maximum lim-
it attributable to employer contributions
must be uniform for all participants, if the
HRA provides the same maximum dollar
amount to all employees who are mem-
bers of a particular class of employees,
limited to the classes specified in the pro-
posed integration regulations, and subject
to the exceptions allowed under the same
terms requirement.
Commenters generally supported the
potential section 105(h) safe harbors, but
some commenters requested clarification
as to how the potential section 105(h) safe
harbors would function in practice, and
commenters requested examples.
75
In light of the final integration regu-
lations, and for the reasons described in
Notice 2018-88 and earlier in this section
of the preamble, it continues to be the
case that safe harbors are needed under
the section 105(h) regulations to facilitate
the offering of individual coverage HRAs.
However, with respect to age variance,
instead of proposing the anticipated safe
harbor set forth in Notice 2018-88, to
minimize the complexity and employer
burden in complying with multiple regu-
latory requirements, the proposed regula-
tions provide that an individual coverage
HRA that satisfies the age variation excep-
tion under the same terms requirement at
§54.9802-4(c)(3)(iii)(B) will not be treat-
ed as failing to satisfy the requirements to
provide nondiscriminatory benefits under
§1.105-11(c)(3)(i) solely due to the vari-
ation based on age. More generally, and
as anticipated in Notice 2018-88, the pro-
posed regulations also provide that if the
maximum dollar amount made available
varies for participants within a class of
employees, or varies between classes of
employees, then with respect to that vari-
ance, the individual coverage HRA does
not violate the requirement in §1.105-
11(c)(3)(i) that any maximum limit attrib-
utable to employer contributions must be
uniform for all participants, if within each
class of employees, the maximum dollar
amount only varies in accordance with the
same terms requirement and, with respect
to differences in the maximum dollar
amount made available for different class-
es of employees, the classes of employ-
ees are classes of employees set forth in
§54.9802-4(d).
Nonetheless, the Treasury Department
and the IRS note that satisfying the terms
of the safe harbors under the proposed
regulations does not automatically satisfy
the prohibition on nondiscriminatory op-
eration under §1.105-11(c)(3)(ii). Thus,
among other situations, if a disproportion-
ate number of HCIs qualify for and utilize
the maximum HRA amount allowed un-
der the same terms requirement based on
age in comparison to the number of non-
HCIs who qualify for and use lower HRA
amounts based on age, the individual cov-
erage HRA may be found to be discrim-
inatory, with the result that excess reim-
bursements of the HCIs will be included
in their income.
76
C. Application of Section 125 Cafeteria
Plan Rules to Arrangements Involving
Individual Coverage HRAs
The preamble to the proposed and fi-
nal HRA integration regulations noted that
some employers may want to allow em-
ployees to pay the portion of the premium
for individual health insurance coverage
that is not covered by an individual cov-
erage HRA, if any, through a salary reduc-
tion arrangement under a section 125 caf-
eteria plan. Pursuant to section 125(f)(3),
an employer generally may not provide a
qualified health plan purchased through
an Exchange as a benefit under its cafe-
teria plan. Therefore, an employer may
not permit employees to make salary re-
duction contributions to a cafeteria plan to
purchase a qualified health plan (includ-
ing individual health insurance coverage)
offered through an Exchange. However,
section 125(f)(3) does not apply to indi-
vidual health insurance coverage that is
not offered through an Exchange (referred
to as “off Exchange”). Therefore, for an
employee who purchases off-Exchange
individual health insurance coverage, the
employer may permit the employee to pay
the balance of the premium for the cover-
age through its cafeteria plan. The Trea-
sury Department and the IRS appreciate
the comments received on this topic in
response to the proposed integration reg-
ulations and request additional comments
regarding any specific issues raised by the
application of the section 125 cafeteria
plan rules to arrangements involving indi-
vidual coverage HRAs for which clarifi-
cation is needed or for which a modifica-
tion of the applicable rules may decrease
burdens.
Some commenters in response to the
proposed integration regulations request-
ed that individuals be allowed to use a caf-
eteria plan to pay premiums for qualified
health plans offered through an Exchange
with salary reduction. As discussed in the
preceding paragraph, section 125(f)(3)
prohibits using a cafeteria plan to allow
employees to pay premiums for a qualified
health plan offered through an Exchange.
Proposed Applicability Date
The proposed regulations under sec-
tion 4980H are proposed to apply for pe-
riods beginning after December 31, 2019,
and the proposed regulations under sec-
tion 105(h) are proposed to apply for plan
years beginning after December 31, 2019.
The Treasury Department and the IRS rec-
ognize that employers may want to offer
individual coverage HRAs beginning on
January 1, 2020, and, therefore, may need
applicable guidance with respect to sec-
tions 4980H and/or 105(h) to design and
implement programs involving individual
coverage HRAs prior to the issuance of
any final regulations and in advance of the
75
Some commenters addressed the ability to vary individual coverage HRA amounts by age for purposes of integration of HRAs with individual health insurance coverage, and a full response
to those comments is included in the preamble to the final integration regulations. See 84 FR 28888 (June 20, 2019), 28904-28907.
76
See §1.105-11(c)(3).

Bulletin No. 2019–42 977 October 15, 2019
plan year for which the individual cover-
age HRAs will be offered. Accordingly,
taxpayers may rely on the proposed reg-
ulations under section 4980H for periods
during any plan year of individual cover-
age HRAs beginning before the date that
is six months following the publication of
any final regulations, and taxpayers may
rely on the proposed regulations under
section 105(h) for plan years of individual
coverage HRAs beginning before the date
that is six months following the publica-
tion of any final regulations.
Statutory Authority
The regulations are proposed to be ad-
opted pursuant to the authority contained
in sections 7805 and 9833.
Special Analyses
This regulation is not subject to re-
view under section 6(b) of Executive Or-
der 12866 pursuant to the Memorandum
of Agreement (April 11, 2018) between
the Department of the Treasury and the
Office of Management and Budget regard-
ing review of tax regulations. Because
this regulation does not impose a col-
lection of information on small entities,
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to sec-
tion 7805(f) of the Internal Revenue Code,
this regulation has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment on
its impact on small business.
Comments and Requests for Public
Hearing
The Treasury Department and the IRS
request comments on all aspects of the
proposed regulations. Before the proposed
regulations are adopted as final regula-
tions, consideration will be given to any
comments that are submitted timely to the
IRS as prescribed in this preamble under
the ADDRESSES heading. All comments
will be available at https://www.regula-
tions.gov. A public hearing will be sched-
uled if requested in writing by any person
that timely submits written comments. If
a public hearing is scheduled, then notice
of the date, time, and place for the public
hearing will be published in the Federal
Register.
Drafting Information
The principal author of the proposed
regulations is Jennifer Solomon of the Of-
fice of Associate Chief Counsel (Employ-
ee Benefits, Exempt Organizations, and
Employment Taxes). However, other per-
sonnel from the Treasury Department and
the IRS participated in the development of
the proposed regulations.
Statement of Availability of IRS
Documents
The Notices cited in this document are
published in the Internal Revenue Bulletin
(or Cumulative Bulletin) and are available
from the Superintendent of Documents,
U.S. Government Publishing Office,
Washington, DC 20402, or by visiting the
IRS website at http://www.irs.gov.
List of Subjects
26 CFR Part 1
Income Taxes, Reporting and record-
keeping requirements.
26 CFR Part 54
Excise taxes, Health care, Health in-
surance, Pensions, Reporting and record-
keeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 54 are
proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.105-11 is amended
by revising paragraphs (c)(3)(i) and (j) to
read as follows:
§1.105-11 Self-insured medical reim-
bursement plan.
* * * * *
(c) * * *
(3) * * *
(i) In general—(A) Benefits. In gener-
al, benefits subject to reimbursement un-
der a plan must not discriminate in favor
of highly compensated individuals. Plan
benefits will not satisfy the requirements
of this paragraph (c)(3)(i)(A) unless all
the benefits provided for participants
who are highly compensated individuals
are provided for all other participants. In
addition, all the benefits available for the
dependents of employees who are high-
ly compensated individuals must also be
available on the same basis for the de-
pendents of all other employees who are
participants. A plan that provides optional
benefits to participants will be treated as
providing a single benefit with respect to
the benefits covered by the option provid-
ed that all eligible participants may elect
any of the benefits covered by the option
and there are either no required employ-
ee contributions or the required employee
contributions are the same amount. This
test is applied to the benefits subject to
reimbursement under the plan rather than
the actual benefit payments or claims un-
der the plan. The presence or absence of
such discrimination will be determined by
considering the type of benefit subject to
reimbursement provided highly compen-
sated individuals, as well as the amount of
the benefit subject to reimbursement.
(B) Maximum limits—(1) Uniformity
rule. A plan may establish a maximum
limit for the amount of reimbursement
which may be paid a participant for any
single benefit, or combination of benefits.
However, except as otherwise provided in
paragraph (c)(3)(i)(B)(2) of this section,
any maximum limit attributable to em-
ployer contributions must be uniform for
all participants and for all dependents of
employees who are participants and may
not be modified by reason of a partici-
pant’s age or years of service.
(2) Exception to uniformity rule. With
respect to an individual coverage HRA, as
defined in §54.9802-4(b) of this chapter, if
the maximum dollar amount made avail-
able varies for participants within a class
of employees set forth in §54.9802-4(d) of
this chapter, or varies between classes of
employees offered the individual cover-
age HRA, the plan does not violate the re-
quirements of this paragraph (c)(3) by vir-
tue of that variance; provided that, within

October 15, 2019 978 Bulletin No. 2019–42
a class of employees, the maximum dol-
lar amount made available varies only in
accordance with the same terms require-
ment set forth in §54.9802-4(c)(3) of this
chapter, and, with respect to differences in
the maximum dollar amount made avail-
able for different classes of employees,
each of the classes of employees is one
of the classes of employees set forth in
§54.9802-4(d) of this chapter. Specifical-
ly, with respect to age-based variances, in
the case of an individual coverage HRA, if
the maximum dollar amount made avail-
able to participants who are members of
a particular class of employees increas-
es based on the age of each participant
and the increases in the maximum dollar
amount comply with the age-variation
rule under the same terms requirement
set forth under §54.9802-4(c)(3)(iii)(B) of
this chapter, the plan does not violate the
requirements of this paragraph (c)(3) with
respect to those increases.
(C) Reference to employee compensa-
tion. If a plan covers employees who are
highly compensated individuals, and the
type or the amount of benefits subject to
reimbursement under the plan are in pro-
portion to employee compensation, the
plan discriminates as to benefits.
* * * * *
(j) Applicability date. Section 105(h)
and this section, except for paragraph (c)
(3)(i)(B)(2) of this section, are applicable
for taxable years beginning after Decem-
ber 31, 1979 and for amounts reimbursed
after December 31, 1979. In determining
plan discrimination and the taxability of
excess reimbursements made for a plan
year beginning in 1979 and ending in
1980, a plan’s eligibility and benefit re-
quirements as well as actual reimburse-
ments made in the plan year during 1979,
will not be taken into account. In addition,
this section does not apply to expenses
which are incurred in 1979 and paid in
1980. Paragraph (c)(3)(i)(B)(2) of this
section is applicable for plan years begin-
ning after December 31, 2019.
* * * * *
PART 54—PENSION EXCISE TAXES
Par. 3. The authority citation for part 54
continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
§ 54.4980H-4 [Amended]
Par. 4. Section 54.4980H-4 is amended
by removing “9.5 percent of” and adding
in its place “the product of the required
contribution percentage (as defined in
§1.36B-2(c)(3)(v)(C) of this chapter) and”
in the first sentence of paragraph (b)(1).
Par. 5. Section 54.4980H-5 is amended
by:
a. Revising paragraph (e)(2) introducto-
ry text;
b. In paragraph (e)(2)(i):
i Removing “an” and adding in its
place “a general” in the heading;
and
ii. Removing “affordability” and
adding in its place “general af-
fordability” in the first sentence;
c. Removing “9.5 percent of” and add-
ing in its place “the product of the re-
quired contribution percentage (as de-
fined in §1.36B-2(c)(3)(v)(C)) and”
in the first sentence of paragraphs (e)
(2)(ii)(A) and (B), the first and sec-
ond sentences of paragraph (e)(2)(iii),
and the first sentence of paragraph (e)
(2)(iv);
d. In paragraph (e)(2)(v):
i. Adding a sentence to the end of the
introductory text; and
ii. Designating Examples 1 through 6 as
paragraphs (e)(2)(v)(A) through (F),
respectively;
e. In newly designated (e)(2)(v)(A)
through (F), redesignating the para-
graphs in the first column as the para-
graphs in the second column:
Old ParagraphsNew Paragraphs
(e)(2)(v)(A)(i) and (ii)
(e)(2)(v)(A)(1) and (2)
(e)(2)(v)(B)(i) and (ii)
(e)(2)(v)(B)(1) and (2)
(e)(2)(v)(C)(i) and (ii)
(e)(2)(v)(C)(1) and (2)
(e)(2)(v)(D)(i) and (ii)
(e)(2)(v)(D)(1) and (2)
(e)(2)(v)(E)(i) and (ii)
(e)(2)(v)(E)(1) and (2)
(e)(2)(v)(F)(i) and (ii)
(e)(2)(v)(F)(1) and (2)
f. Redesignating paragraphs (f) and (g)
as paragraphs (g) and (h), respective-
ly;
g. Adding a new paragraph (f); and
h. Revising newly redesignated para-
graph (h).
The revisions and additions read as fol-
lows:
§54.4980H–5 Assessable payments
under section 4980H(b).
* * * * *
(e) * * *
(2) Affordability safe harbors for sec-
tion 4980H(b) purposes. The affordability
safe harbors set forth in paragraphs (e)(2)
(ii) through (iv) of this section (general
affordability safe harbors) apply sole-
ly for purposes of section 4980H(b), so
that an applicable large employer mem-
ber that offers minimum essential cov-
erage providing minimum value will
not be subject to an assessable payment
under section 4980H(b) with respect to
any employee receiving the applicable
premium tax credit or cost-sharing reduc-
tion for a period for which the coverage
is determined to be affordable under the
requirements of a general affordability
safe harbor. The preceding sentence ap-
plies even if the applicable large employ-

Bulletin No. 2019–42 979 October 15, 2019
er member’s offer of coverage that meets
the requirements of a general affordability
safe harbor is not affordable for a partic-
ular employee under section 36B(c)(2)(C)
(i) and §1.36B-2(c)(3)(v) of this chapter,
and an applicable premium tax credit or
cost-sharing reduction is allowed or paid
with respect to that employee. The gen-
eral affordability safe harbors apply with
respect to offers of minimum essential
coverage other than the offer of an indi-
vidual coverage HRA, as defined in para-
graph (f)(7) of this section. Paragraph (f)
of this section sets forth affordability and
minimum value safe harbors that apply to
the offer of an individual coverage HRA
(individual coverage HRA safe harbors).
* * * * *
(v) * * * For purposes of simplicity,
the examples in this paragraph (e)(2)(v)
assume 9.5 percent is the required con-
tribution percentage for 2015 and 2016,
although the required contribution per-
centage in 2015 and 2016 was adjusted for
those years pursuant to §1.36B-2(c)(3)(v)
(C) of this chapter.
* * * * *
(f) Affordability and minimum val-
ue safe harbors for individual coverage
HRAs—(1) In general. Whether an offer
of an individual coverage HRA is treat-
ed as affordable and providing minimum
value, in general, is determined under
§1.36B-2(c)(3)(i)(B), (c)(3)(vi), and (c)
(5) of this chapter. This paragraph (f) sets
forth safe harbors that an applicable large
employer member may use in determining
whether an offer of an individual coverage
HRA is affordable or provides minimum
value for purposes of section 4980H(b),
even if the offer of the individual coverage
HRA is not affordable or does not provide
minimum value under §1.36B-2(c)(3)(i)
(B), (c)(3)(vi), and (c)(5) of this chapter.
An applicable large employer member
that offers an individual coverage HRA is
not subject to an assessable payment un-
der section 4980H(b) with respect to any
full-time employee receiving the appli-
cable premium tax credit or cost-sharing
reduction for a period for which the indi-
vidual coverage HRA is determined to be
affordable and to provide minimum value
applying the safe harbors provided in this
paragraph (f). The preceding sentence ap-
plies even if the applicable large employer
member’s offer of an individual cover-
age HRA that is affordable and provides
minimum value applying the safe harbors
under this paragraph (f) is not affordable
or does not provide minimum value for a
particular employee under §1.36B-2(c)(3)
(i)(B), (c)(3)(vi), and (c)(5) of this chap-
ter, and an applicable premium tax cred-
it or cost-sharing reduction is allowed or
paid with respect to that employee. To the
extent not addressed in this paragraph (f),
the rules under §1.36B-2(c)(3)(i)(B), (c)
(3)(vi), and (c)(5) of this chapter apply
in determining whether an offer of an in-
dividual coverage HRA is affordable and
provides minimum value for purposes of
section 4980H(b). Further, an applica-
ble large employer member may rely on
information provided by an Exchange
in determining whether the offer of an
individual coverage HRA is affordable
and provides minimum value. See para-
graph (f)(7) of this section for definitions
that apply to this paragraph (f), which are
in addition to the definitions set forth in
§54.4980H-1(a).
(2) Conditions of using an individual
coverage HRA safe harbor. An applica-
ble large employer member may use one
or more of the safe harbors described in
this paragraph (f) only with respect to the
full-time employees and their dependents
to whom the applicable large employer
member offered the opportunity to en-
roll in an individual coverage HRA. The
safe harbors in this paragraph (f) apply
only to the offer of an individual cover-
age HRA, but to the extent an applica-
ble large employer member offers some
full-time employees and their dependents
an individual coverage HRA and other
full-time employees and their dependents
other coverage under an eligible employ-
er-sponsored plan that provides minimum
value with respect to the self-only cover-
age offered to the employee, the applica-
ble large employer member may use the
safe harbors under this paragraph (f) for
the offers of the individual coverage HRA
and the general affordability safe harbors
under paragraph (e)(2) of this section for
the offers of other coverage. Use of any
of the safe harbors in this paragraph (f) is
optional for an applicable large employer
member, and an applicable large employ-
er member may choose to apply the safe
harbors for any class of employees (as de-
fined in paragraph (f)(7) of this section),
provided it does so on a uniform and con-
sistent basis for all employees in the class
of employees. Each of the safe harbors set
forth in this paragraph (f) may be used in
combination with the other safe harbors
provided in this paragraph (f), subject to
the conditions of the safe harbors.
(3) Minimum value. An individual cov-
erage HRA that is affordable for a calen-
dar month under §1.36B-2(c)(5) of this
chapter, taking into account any applica-
ble safe harbors under this paragraph (f),
is treated as providing minimum value for
the calendar month, for purposes of sec-
tion 4980H(b).
(4) Look-back month safe harbor—(i)
In general. In determining an employee’s
required HRA contribution for a calendar
month, for purposes of section 4980H(b),
an applicable large employer member may
use the monthly premium for the applica-
ble lowest cost silver plan for the month
specified in either paragraph (f)(4)(i)(A)
or (B) of this section, as applicable (the
look-back month):
(A) Calendar year plan. For an individ-
ual coverage HRA with a plan year that is
the calendar year, an applicable large em-
ployer member may use the monthly pre-
mium for the applicable lowest cost silver
plan for January of the prior calendar year.
(B) Plan year that is not the calendar
year. For an individual coverage HRA
with a plan year that is not the calendar
year, an applicable large employer mem-
ber may use the monthly premium for the
applicable lowest cost silver plan for Jan-
uary of the current calendar year.
(ii) Application of look-back month
safe harbor to employee’s current cir-
cumstances. In determining the monthly
premium for the applicable lowest cost
silver plan based on the applicable look-
back month, the applicable large employer
member must use the employee’s applica-
ble age for the current plan year and the
employee’s applicable location for the
current calendar month. In general, the ap-
plicable large employer member may use
the monthly premium of the applicable
lowest cost silver plan for the applicable
look-back month for all calendar months
of the plan year. However, to the extent
the employee’s applicable location chang-
es during the plan year, although the ap-
plicable large employer member may con-
tinue to determine the monthly premium

October 15, 2019 980 Bulletin No. 2019–42
based on the applicable look-back month,
the applicable large employer member
must use the employee’s new applicable
location, in accordance with the rules set
forth under paragraph (f)(6) of this section
if applicable, to determine the applicable
lowest cost silver plan used to determine
the monthly premium.
(5) Application of the general afford-
ability safe harbors to individual cover-
age HRAs. The general affordability safe
harbors set forth in paragraphs (e)(2)(ii),
(iii), and (iv) of this section may apply to
an offer of an individual coverage HRA
by an applicable large employer member
to a full-time employee for purposes of
section 4980H(b), subject to the modifica-
tions set forth in this paragraph (f)(5).
(i) Form W-2 safe harbor applied to
individual coverage HRAs. An applica-
ble large employer member satisfies the
Form W-2 safe harbor of paragraph (e)(2)
(ii) of this section with respect to an offer
of an individual coverage HRA to an em-
ployee for a calendar year, or if applica-
ble, part of a calendar year, if the individ-
ual coverage HRA is affordable under the
Form W-2 safe harbor under paragraph (e)
(2)(ii) of this section but substituting “the
employee’s required HRA contribution, as
determined taking into account any other
safe harbors in paragraph (f) of this sec-
tion, if applicable” for each of the follow-
ing phrases — “that employee’s required
contribution for the calendar year for the
employer’s lowest cost self-only coverage
that provides minimum value”, “the re-
quired employee contribution”, “the em-
ployee’s required contribution”, and “the
employee’s required contribution for the
employer’s lowest cost self-only coverage
that provides minimum value.”
(ii) Rate of pay safe harbor applied to
individual coverage HRAs. An applicable
large employer member satisfies the rate
of pay safe harbor of paragraph (e)(2)(iii)
of this section with respect to an offer of
an individual coverage HRA to an em-
ployee for a calendar month if the individ-
ual coverage HRA is affordable under the
rate of pay safe harbor of paragraph (e)(2)
(iii) of this section but substituting “the
employee’s required HRA contribution, as
determined taking into account any other
safe harbors in paragraph (f) of this sec-
tion, if applicable,” for “the employee’s
required contribution for the calendar
month for the applicable large employer
member’s lowest cost self-only coverage
that provides minimum value.”
(iii) Federal poverty line safe harbor
applied to individual coverage HRAs. An
applicable large employer member satis-
fies the Federal poverty line safe harbor
of paragraph (e)(2)(iv) of this section with
respect to an offer of an individual cover-
age HRA to an employee for a calendar
month if the individual coverage HRA is
affordable under the federal poverty line
safe harbor of paragraph (e)(2)(iv) of this
section but substituting “the employee’s
required HRA contribution, as determined
taking into account any other safe harbors
in paragraph (f) of this section, if appli-
cable,” for “the employee’s required con-
tribution for the calendar month for the
applicable large employer member’s low-
est cost self-only coverage that provides
minimum value.”
(6) Location safe harbor—(i) In gener-
al. For purposes of section 4980H(b), an
applicable large employer member may
determine an employee’s required HRA
contribution for a calendar month based
on the cost of the applicable lowest cost
silver plan for the location of the employ-
ee’s primary site of employment.
(ii) Primary site of employment—(A)
In general. An employee’s primary site
of employment generally is the location
at which the applicable large employer
member reasonably expects the employee
to perform services on the first day of the
plan year (or on the first day the individ-
ual coverage HRA may take effect, for an
employee who is not eligible for the indi-
vidual coverage HRA on the first day of
the plan year). However, the employee’s
primary site of employment is treated as
changing if the location at which the em-
ployee performs services changes and the
employer expects the change to be perma-
nent or indefinite; in that case, in general,
the employee’s primary site of employ-
ment is treated as changing no later than
the first day of the second calendar month
after the employee has begun performing
services at the new location. Nonetheless,
if an applicable large employer member is
first offering an individual coverage HRA
to a class of employees, and the change
in location occurs prior to the individual
coverage HRA’s initial plan year, the em-
ployee’s primary site of employment is
treated as changing no later than the later
of the first day of the plan year or the first
day of the second calendar month after the
employee has begun performing services
at the new location.
(B) Remote workers. In the case of an
employee who regularly performs ser-
vices from home or another location that
is not on the applicable large employer
member’s premises, but who may be re-
quired by his or her employer to work at,
or report to, a particular location, such as
a teleworker with an assigned office space
or available workspace at a particular lo-
cation to which he or she may be required
to report, the location to which the em-
ployee would report to provide services if
requested is the primary site of employ-
ment. In the case of an employee who
works remotely from home or at another
location that is not on the premises of the
applicable large employer member and
who otherwise does not have an assigned
office space or a particular location to
which to report, the employee’s residence
is the primary site of employment.
(7) Definitions. The definitions in this
paragraph (f)(7) apply for purposes of this
paragraph (f).
(i) Applicable age. For an employee
who is or will be eligible for an individual
coverage HRA on the first day of the plan
year, the employee’s applicable age for the
plan year is the employee’s age on the first
day of the plan year. For an employee who
becomes eligible for an individual cov-
erage HRA during the plan year, the em-
ployee’s applicable age for the remainder
of the plan year is the employee’s age on
the date the individual coverage HRA can
first become effective with respect to the
employee.
(ii) Applicable location. An employ-
ee’s applicable location is where the em-
ployee resides for the calendar month, or,
if the applicable large employer member
is applying the location safe harbor under
paragraph (f)(6) of this section, the em-
ployee’s primary site of employment for
the calendar month.
(iii) Applicable lowest cost silver
plan—(A) In general. The applicable
lowest cost silver plan for an employee
for a calendar month generally is the low-
est cost silver plan for self-only coverage
of the employee offered through the Ex-

Bulletin No. 2019–42 981 October 15, 2019
change for the employee’s applicable lo-
cation for the month.
(B) Different lowest cost silver plans in
different parts of the same rating area. If
there are different lowest cost silver plans
in different parts of a rating area, an em-
ployee’s applicable lowest cost silver plan
is the lowest cost silver plan in the part
of the rating area in which the employee’s
applicable location is located.
(C) Lowest cost silver plan identified
for use for employees of all ages. The ap-
plicable lowest cost silver plan for an em-
ployee is the lowest cost silver plan for the
lowest age band in the individual market
for the employee’s applicable location.
(iv) Class of employees. A class of em-
ployees means a class of employees as set
forth in §54.9802-4(d)(2).
(v) Individual coverage HRA. An indi-
vidual coverage HRA means an individual
coverage HRA as set forth in §54.9802-4.
(vi) Required contribution percentage.
Required contribution percentage means
the required contribution percentage as
defined in §1.36B-2(c)(3)(v)(C) of this
chapter.
(vii) Required HRA contribution. In
general, the required HRA contribution
means the required HRA contribution as
defined in §1.36B-2(c)(5)(ii) of this chap-
ter. However, for purposes of the safe
harbors set forth in this paragraph (f), the
required HRA contribution is determined
based on the applicable lowest cost silver
plan as defined in paragraph (f)(7)(iii) of
this section and the monthly premium for
the applicable lowest cost silver plan is
determined based on the employee’s ap-
plicable age, as defined in paragraph (f)
(7)(i) of this section, and the employee’s
applicable location, as defined in para-
graph (f)(7)(ii) of this section.
(8) Examples. The following examples
illustrate the application of the safe har-
bors under this paragraph (f) to applicable
large employer members that offer an in-
dividual coverage HRA to at least some of
their full-time employees.
(i) Example 1 (Location safe harbor and look-
back month safe harbor applied to calendar-year
individual coverage HRA)—(A) Facts. For 2020,
Employer Y offers all full-time employees and their
dependents an individual coverage HRA with a cal-
endar-year plan year and makes $6,000 available in
the HRA for the 2020 calendar-year plan year to each
full-time employee without regard to family size,
which means the monthly HRA amount for each full-
time employee is $500. All of Employer Y’s employ-
ees have a primary site of employment in City A.
Employer Y chooses to use the location safe harbor
and the look-back month safe harbor. Employer Y
also chooses to use the rate of pay safe harbor for
its full-time employees. Employee M is 40 years old
on January 1, 2020, the first day of the plan year.
The monthly premium for the applicable lowest cost
silver plan for a 40 year old offered through the Ex-
change in City A for January 2019 is $600. Employ-
ee M’s required HRA contribution for each month
of 2020 is $100 (cost of the applicable lowest cost
silver plan determined under the location safe harbor
and the look-back month safe harbor ($600) minus
the monthly HRA amount ($500)). The monthly
amount determined under the rate of pay safe harbor
for Employee M is $2,000 for each month in 2020.
(B) Conclusion. Employer Y has made an offer
of affordable, minimum value coverage to Employ-
ee M for purposes of section 4980H(b) for each
month of 2020 because Employee M’s required HRA
contribution ($100) is less than the amount equal to
the required contribution percentage for 2020 multi-
plied by the monthly amount determined under the
rate of pay safe harbor for Employee M (9.78 percent
of $2,000 = $196). Employer Y will not be liable for
an assessable payment under section 4980H(b) with
respect to Employee M for any calendar month in
2020. (Also, Employer Y will not be liable for an
assessable payment under section 4980H(a) for any
calendar month in 2020 because it offered an indi-
vidual coverage HRA, an eligible employer-spon-
sored plan that is minimum essential coverage, to all
full-time employees and their dependents for each
calendar month in 2020.)
(ii) Example 2 (Location safe harbor and look-
back month safe harbor applied to non-calendar
year individual coverage HRA)—(A) Facts. Em-
ployer Z offers all full-time employees and their
dependents an individual coverage HRA with a
non-calendar year plan year of July 1, 2020 through
June 30, 2021, and makes $6,000 available in the
HRA for the plan year to each full-time employ-
ee without regard to family size, which means the
monthly HRA amount for each full-time employee is
$500. All of Employer Z’s employees have a primary
site of employment in City B. Employer Z chooses to
use the location safe harbor and the look-back month
safe harbor. Employer Z also chooses to use the rate
of pay safe harbor for its full-time employees. Em-
ployee N is 40 years old on July 1, 2020, the first
day of the plan year. The monthly premium for the
applicable lowest cost silver plan for a 40 year old
offered through the Exchange in City B for January
2020 is $600. Employee N’s required HRA contribu-
tion for each month of the plan year beginning July
1, 2020, is $100 (cost of the applicable lowest cost
silver plan determined under the location safe harbor
and the look-back month safe harbor ($600) minus
the monthly HRA amount ($500)). The monthly
amount determined under the rate of pay safe harbor
for Employee N is $2,000 for each month of the plan
year beginning July 1, 2020.
(B) Conclusion. Employer Z has made an offer of
affordable, minimum value coverage to Employee N
for purposes of section 4980H(b) for each month of
the plan year beginning July 1, 2020, because Em-
ployee N’s required HRA contribution ($100) is less
than the amount equal to the required contribution
percentage for plan years beginning in 2020 multi-
plied by the monthly amount determined under the
rate of pay safe harbor for Employee N (9.78 percent
of $2,000 = $196). Employer Z will not be liable for
an assessable payment under section 4980H(b) with
respect to Employee N for any calendar month in the
plan year beginning July 1, 2020. (Also, Employer Z
will not be liable for an assessable payment under
section 4980H(a) for any calendar month in the plan
year beginning July 1, 2020, because it offered an in-
dividual coverage HRA, an eligible employer-spon-
sored plan that is minimum essential coverage, to all
full-time employees and their dependents for each
calendar month in that plan year.)
* * * * *
(h) Applicability date. Paragraphs (a)
through (e) and (g) of this section are ap-
plicable for periods after December 31,
2014. Paragraph (f) of this section is ap-
plicable for periods after December 31,
2019.
Kirsten Wielobob,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on Sep-
tember 27, 2019, 8:45 a.m., and published in the is-
sue of the Federal Register for September 30, 2019,
84 F.R. 51471)

Bulletin No. 2019–42 i October 15, 2019
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 be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing 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 transactions.
This term is most commonly used in a ruling
that lists previously published rulings 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
period 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 previous-
ly 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 cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
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.
CY—County.
D—Decedent.
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.
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.
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.
X—Corporation.
Y—Corporation.
Z—Corporation.

October 15, 2019 ii Bulletin No. 2019–42
Numerical Finding List
1
Bulletin 2019–42
AOD:
2019-02, 2019-41 I.R.B. 806
2019-03, 2019-42 I.R.B. 934
Announcements:
2019-07, 2019-27 I.R.B. 62
2019-08, 2019-32 I.R.B. 621
Notices:
2019-12, 2019-27 I.R.B. 57
2019-40, 2019-27 I.R.B. 59
2019-41, 2019-28 I.R.B. 256
2019-42, 2019-29 I.R.B. 352
2019-27, 2019-31 I.R.B. 484
2019-43, 2019-31 I.R.B. 487
2019-24, 2019-31 I.R.B. 489
2019-45, 2019-32 I.R.B. 593
2019-48, 2019-36 I.R.B. 678
2019-46, 2019-37 I.R.B. 695
2019-49, 2019-37 I.R.B. 699
2019-50, 2019-37 I.R.B. 700
2019-47, 2019-39 I.R.B. 731
2019-51, 2019-41 I.R.B. 866
2019-52, 2019-41 I.R.B. 869
2019-54, 2019-42 I.R.B. 935
2019-55, 2019-42 I.R.B. 937
Proposed Regulations:
REG-105476-18, 2019-27 I.R.B. 63
REG-106282-18, 2019-28 I.R.B. 259
REG-101828-19, 2019-29 I.R.B. 412
REG-106877-18, 2019-30 I.R.B. 441
REG-121508-18, 2019-30 I.R.B. 456
REG-105474-18, 2019-31 I.R.B. 493
REG-118425-18, 2019-31 I.R.B. 539
REG-130700-14, 2019-36 I.R.B. 681
REG-101378-19, 2019-37 I.R.B. 702
REG-104554-18, 2019-39 I.R.B. 737
REG-104870-18, 2019-39 I.R.B. 754
REG-102508-16, 2019-40 I.R.B. 777
REG-125710-18, 2019-40 I.R.B. 785
REG-106808-19, 2019-41 I.R.B. 912
REG-136401-18, 2019-42 I.R.B. 960
Revenue Rulings:
2019-16, 2019-28 I.R.B. 96
2019-17, 2019-32 I.R.B. 583
2019-18, 2019-35 I.R.B. 668
2019-19, 2019-36 I.R.B. 674
2019-20, 2019-36 I.R.B. 675
2019-21, 2019-38 I.R.B. 708
Revenue Rulings:—Continued
2019-22, 2019-40 I.R.B. 776
2019-23, 2019-41 I.R.B. 807
Revenue Procedures:
2019-24, 2019-29 I.R.B. 353
2019-28, 2019-32 I.R.B. 596
2019-29, 2019-32 I.R.B. 620
2019-30, 2019-33 I.R.B. 638
2019-31, 2019-33 I.R.B. 643
2019-32, 2019-33 I.R.B. 659
2019-33, 2019-34 I.R.B. 662
2019-34, 2019-35 I.R.B. 669
2019-23, 2019-38 I.R.B. 725
2019-36, 2019-38 I.R.B. 729
2019-37, 2019-39 I.R.B. 731
2019-35, 2019-41 I.R.B. 870
2019-38, 2019-42 I.R.B. 942
2019-39, 2019-42 I.R.B. 945
Treasury Decisions:
9863, 2019-27 I.R.B. 1
9864, 2019-27 I.R.B. 6
9865, 2019-27 I.R.B. 27
9867, 2019-28 I.R.B. 98
9868, 2019-28 I.R.B. 252
9866, 2019-29 I.R.B. 261
9861, 2019-30 I.R.B. 433
9869, 2019-30 I.R.B. 438
9862, 2019-31 I.R.B. 477
9872, 2019-32 I.R.B. 585
9871, 2019-33 I.R.B. 624
9873, 2019-33 I.R.B. 630
9874, 2019-41 I.R.B. 809
9875, 2019-41 I.R.B. 856
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

Bulletin No. 2019–42 iii October 15, 2019
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2019–42
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018–27 through 2018–52 is in Internal Revenue Bulletin
2018–52, dated December 27, 2018.

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