As a result of the Supreme Court upholding the Affordable Care Act (ACA), employers must continue to satisfy its requirements. In general, employer-sponsored group health plans that provide applicable employer-sponsored coverage are subject to ACA. There are a few limited exceptions, but most fully insured and self-insured group health plans are covered. If an employer determines their health benefits are covered, then they have several action items to address before year-end.
- Employers must provide a summary of benefits and coverage to participants for plan years beginning on or after September 23, 2012. By and large, insurers will be preparing these disclosures, but employers will be required to distribute them to plan participants.
Payroll and W-2 reporting systems will need to be modified to accommodate 2012 W-2 changes and 2013 payroll tax/benefit changes.
- The value of 2012 health coverage must be reported on the 2012 W-2 forms that are due by January 31, 2013. Revenue Procedure 2011-28, Q&A 24-27 details the methods for calculating the cost of coverage that must be reported.
- Payroll systems must be modified to reflect the additional Medicare tax that is applicable to “high income earners.” High income earners are defined as individuals, filing separately, with earned income over $200,000 and joint filers with earned income over $250,000. The additional tax only applies to the excess earned income over the limits.
- Incorporate new $2,500 health Flexible Spending Account limit in into payroll system and cafeteria plan documents.
Employers should be mindful of potential modifications to the ACA requirements, especially in light of the upcoming Presidential election.
If you should have any questions regarding the above, please contact your Aronson tax professional or Mark Flanagan of Aronson’s Employee Benefit Plan Services Group at 301.231.6257.
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