Carter's Benefits

eNewsletter Volume 4, Issue 5 May 2011

First, let me start by saying that we respect your right to privacy. If you wish not to be included in these electronic mailings or would like more information, please reply to this email. If you would like to remain on the list, simply do nothing but wait for the next mailing.

If you have a topic you would like us to cover, please let us know.

for breaking news, Click Here

for a complete list of past eNewsletters Click Here

 

 

W2 Reporting Guidance Issued

This is a short month on news.
A lot went on as usual, but there was not as much to report.

Recent News

  1. Small Employers filing less than 250 W2's Voluntary through 2012
  2. What can I use my FSA, HSA or HRA on? IRS Publication 502.
  3. Studies to Commence on "Essential Health Benefits".
  4. 1099 Repeal Signed Into Law .

Small Employers (filing less than 250 W2's) Voluntary through 2012 -
IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage.

Reporting is Voluntary for All Employers for 2011 and Small Employers for 2012
IR-2011-31, March 29, 2011

WASHINGTON — The Internal Revenue Service today issued interim guidance to employers on informational reporting on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee's income, and is not taxable.

The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In today's guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued.

Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.

The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov.

Related Items:

Employer-Provided Health Coverage Informational Reporting Requirements: Frequently Asked Questions

YouTube Video:

Health Care: W-2 Health Insurance Reporting: English

[back to the index]

What can I use my FSA, HSA or HRA on? IRS Publication 502 .
IRS Publication 502 - This publication provides information about deductible expenses that can be reimbursed or paid by health FSAs, HSAs, or HRAs.  The latest version of Publication 502 clarifies health insurance costs for self-employed individuals and the health care tax credit.  Additionally, several areas have been updated to reflect changes made by the COBRA premium assistance subsidy.

Aslo look at IRS Publication 969 - This publication has been updated to show that tax-free health FSA and HRA coverage and reimbursement are permitted beginning March 30, 2010 for employees' children who are under age 27 at the end of the employee's taxable year.  Additionally, the publication also addresses the increase to 20% in tax on HSA and MSA distributions that are not used for qualified medical reimbursements. The new requirement that there must be a prescription on OTC drugs purchased after 2010 has also been added.

[back to the index]

Studies to Commence on "Essential Health Benefits".
On January 13, 2011, HHS requested the Institute of Medicine (IOM) to study and make recommendations on the criteria for determining "essential health benefits."  Essential health benefits are referred to under PPACA to describe the benefits that are subject to the prohibition on lifetime and annual limits, as well as to describe the benefits that must be offered through the state exchanges. While the specific definitions may not be available for quite some time, the intent is to make them more specific in order to provide enough flexibility in the marketplace.  

 The IOM is expected to publish a report in September setting forth the criteria for HHS officials to define which treatments are "essential health benefits" requiring coverage. Please note there is no mandate to provide "essential health benefits," except for preventive services required by non-grandfathered plans.  If the plan voluntarily offers the essential health benefits, the plan must comply with the annual and lifetime limit restrictions for those benefits.

In addition to the studies on essential health benefits, the DOL is surveying employer plans to determine the benefits typically covered by such plans.  Instead of conducting a new survey, the DOL will use previously collected data pulled from the DOL's National Compensation Survey, which lists 10 general categories of care that must be covered as essential benefits.  

Advocate groups say there are major holes in the NCS data; however, under the circumstances, it may be the best the DOL has for the time being. Additionally the Bureau of Labor Statistics will begin analyzing plan documents on the categories of benefits identified as essential in PPACA, and produce estimates of the percent of employees with access to plans that cover each of these services.  This information should be available by March 2011.

[back to the index]

1099 Repeal Signed Into Law .
President Obama signed into law a bill that would repeal the 1099 business tax-reporting requirement under the Affordable Care Act.  The provision required businesses and real estate owners to file a 1099 form for every vendor to whom they paid more than $600 in a year.

[back to the index]

How does Carter's Benefits help ?
We continue to stay on top of changes in this industry. In a consultative role, Eddie Carter has begun hosting live seminars to update employers and Human Resource Managers on these changes. If you would like to host a meeting with your local community or civic organization, please contact me for details.

Eddie Carter, Consultant Eddie Carter,
Benefit Consultant
Questions@CartersBenefits.Com
 
 
If you have questions or would like more information please give us a call or send us an email.  Our email address is Questions@CartersBenefits.Com
 
 

Carter's Benefits
Your Benefit Consultant Team

3 Locations to Serve You
 
Statewide Toll Free
(888) 487-9090 Toll Free
 
Austin Texas
10200 Hwy 290 W
Austin, Texas 78736
(512) 402-9001 Office
(512) 402-9012 Fax
 
Yoakum Texas
410 Lott Street
Yoakum, Texas 77995
(361) 293-9090 Office
(361) 293-2122 Fax
 
Victoria
3400-C John Stockbauer
Victoria, Texas 77901
(361) 575-9090 Office
(361) 293-2122 Fax
   
Carter's Benefits | 410 lott Street | Yoakum | TX | 77995