Newly proposed Internal Revenue Service regulations provide employers long-sought guidance on key health reform law issues related to corporate wellness and early retiree health plans.

However, employers still await agency guidance on several other important provisions of the Patient Protection and Affordable Care Act that President Barack Obama signed into law in 2010.

Wellness rules proposed last week involve the relationship between a health plan premium affordability test, slated to go into effect in 2014, and premium discounts employers offer employees as an incentive to participate in wellness programs.

Under that test, coverage is considered affordable as long as the premium paid by an employee for individual coverage does not exceed 9.5% of wages or household income. Premium contributions exceeding that threshold are considered “unaffordable,” subjecting the employer to a $3,000 penalty.

Until now, it wasn't clear whether premium discounts for wellness program participation would be included or excluded when running the affordability test. In the proposed regulations, premium discounts would be excluded in running the affordability test, with the exception of tobacco-cessation programs.

For example, if an employer charged employees a monthly premium of $100 for single coverage if they participated in a wellness program and $120 if they did not, employers would use the $120 premium in the affordability test.

However, in the case of premium discounts for participating in tobacco-cessation programs, employers would be allowed to use the lower premium paid by employees participating in the program or nonsmokers in running the affordability test.

Employee benefits experts are baffled about why all corporate wellness programs were not given the same treatment by the IRS as tobacco-cessation programs.

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“I'm at a loss to explain the different treatment,” said J.D. Piro, a senior vice president with Aon Hewitt in Norwalk, Conn.

“It is very disappointing news for employers with wellness programs,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.

On the other hand, the proposed rules make clear that lower- and middle-income retirees younger than 65 who are eligible for health care coverage from their former employers — but do not actually enroll in the plans — will be eligible for federal premium subsidies in 2014 to purchase policies through public exchanges.

The subsidies will be available to pre-Medicare eligible retirees with adjusted gross incomes up to 400% of the federal poverty level. For a family of four, that would be $94,200 in 2013.

It isn't known how many retirees will be eligible for the subsidies or how many will be better off with exchange coverage or plans from their former employers, but benefit experts welcome regulators giving retirees the ability to decide.

“Retirees will have the flexibility to choose, and that is a good thing,” said Anne Waidmann, a director with PricewaterhouseCoopers L.L.P. in Washington.

“This gives retirees another coverage option,” said Steve Wojcik, vice president-public policy with the National Business Group on Health in Washington.

The proposed IRS rules, though, don't address whether one popular way employers help retirees pay for health care expenses — crediting a stand-alone health reimbursement arrangement with a specific amount of money — would eliminate retirees' eligibility for federal premium subsidies to buy coverage through exchanges.

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While retirees would lose eligibility for federal premium subsidies under the proposed rules if they enrolled in a health plan offered by their former employers, experts say that there isn't a formal enrollment process with HRAs. Instead, the HRAs are made available to retirees.

“This is an issue that will need more clarification,” said Paul Dennett, senior vice president of health policy at the American Benefits Council in Washington.

Other regulatory guidance also is needed.

For example, Tracy Watts, U.S. health care leader in Washington for Mercer L.L.C., said no guidance has been provided on how employers are expected to interact with public insurance exchanges.

Such interaction will occur, for example, if an employee applies for subsidized health coverage offered through an exchange. Exchanges would have to verify, among other things, that the employee meets coverage eligibility criteria, such as working for a company whose health care plan fails the reform law's affordability test or for a company that does not offer a health care plan.

In addition, guidance has yet to be issued on the information statement employers have to provide to employees on the availability of public insurance exchanges.