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W-2 Reporting
Employers must report the value of employer-sponsored health care coverage on employee W-2 Forms. This is not considered taxable income to the employee. Reporting is required for most employers beginning with the 2012 tax year.
Summary of Benefits and Coverage and the Uniform Glossary
Plan sponsors must provide two new government-developed documents to plan participants beginning September 23, 2012 - the "Summary of Benefits and Coverage" (SBC) and the "Uniform Glossary," which are intended to provide high-level descriptions of a plan and definitions of standard terms.
30 Day Enrollment
Plans must offer a minimum of 30 days for open enrollment for the first plan year beginning on or after September 23, 2010.
Automatic Enrollment
Employer-plan sponsors with more than 200 full-time employees must automatically enroll their employees in an employer-sponsored health plan. The effective date for this provision is expected to be established by federal regulations, which the agencies have indicated will be completed by 2014.
Quality Reporting
Plan sponsors of non-grandfathered plans must report on plan benefits and reimbursement structures that provide certain quality-related programs like disease management. Federal guidelines are required to be published sometime before March 23, 2013, and are likely to include an effective date for group health plans.
Coverage and Workforce Reporting
Effective January 1, 2014, employers with 50 or more full-time employees must submit reports to the IRS with extensive details about the employer's health coverage and workforce. Certain reporting is also required for plan sponsors that provide minimum essential coverage, even if the employer has fewer than 50 employees.
Cadillac Tax Reporting
Effective January 1, 2018, employers will be required to calculate and report the amount of the excise tax, if any, that is owed with regard to their health plans.
Patient Protection Notices
By the first day of the first plan year beginning on or after September 23, 2010, plan sponsors must provide certain notices to employees in connection with the requirements to eliminate any lifetime limits, extend eligibility to adult children, and provide direct access to certain providers.
Transparency Disclosures
For plan years beginning on or after September 23, 2010, non-grandfathered plans must provide certain information to HHS and the public, such as claims payment, enrollment, and financial data. Future regulations are epxected to clarify the content and effective date.
Advance Notice of Benefit Changes
Effective September 23, 2012 if any mid-year material modifications in health plan coverage, such as increases in cost-sharing or benefit reductions, are made that are not reflected in the most recently distributed Summary of Benefits and Coverage (SBC), the plan sponsor must send notice of the changes to plan participants at least 60 days before the modifications become effective.
Employee Education for New Hires
Employers must provide information about the state Exchanges to employees. If the actuarial value of the employer's plan is less than 60%, the notice must also describe the availability of a federal premium tax credit and cost-sharing reductions.
Nondiscrimination Testing
In order to ensure compliance with the new nondiscrimination rules for insured, non-grandfathered plans, employers may be required to perform nondiscrimination testing.
Additional Medicare Tax
Effective January 1, 2013, employers must withhold an additional 0.9% Medicare tax on wages paid to employees in excess of $200,000.
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Additional Resources
- Your Guide to American Fidelity's Services
Our experience is your Health Care Reform solution. - Cost management strategies
Explore your health plan cost drivers and possible solutions to help you save.
- Your Guide to American Fidelity's Services
American Fidelity Assurance Company does not provide tax or legal advice.