Healthcare Reform Requirements – an Employer’s Perspective

There are several changes that employers will be implementing this coming year as a result of the Healthcare Reform act (often called Obamacare). These changes affect workers, but they also affect employers.

Following are questions some employer’s are asking about Reform Requirements in 2013.

Summary of Benefits and Coverage (SBC)

Q. What is it?

A.  The SBC replaces the Plan Summaries employers and employees are used to getting from their carriers, which explain the terms of their coverage. The SBC will provide employees with details of coverage, limitations, etc. in a certain specified, uniform format that all carriers must follow. 

Click here to see a Sample SBC template.

 

Q. Where does an employer get the SBC’s?

A. The employer’s insurance company, referred to as the “issuer,” began sending the SBC’s directly to employers for distribution beginning September 23, 2012.

Q. What must an employer do with the SBC’s they receive from the carrier?

A.  SBC’s must be distributed to all currently enrolled employees on a firm’s first day of open enrollment after September 23, 2012 or to new enrollees beginning on the first day of the firm’s plan year following September 23, 2012.

Note: More information about SBC’s can be found here.

W-2 Reporting Coverage Reporting Requirement

Q.  Who must report the cost of an employee’s coverage on employee W-2 forms issued after January 1, 2013.

A.  Employers with 250 or more W-2 forms, who provide coverage under a group health plan, are required to report.

 

Q. What about employers filing fewer than 250 W-2 forms?

A.  The reporting requirement for employers with fewer than 250 W-2 forms will not apply for future calendar years until the IRS publishes guidance giving at least six months advance notice of any change in this “transition relief.”

 

Q. What coverage must be reported?

A. Major Medical, Health FSA's and certain other coverage.  Click here for more details:  http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage.

Note: Click here for more FAQs from the IRS regarding the W-2 reporting requirement.


Health Flexible Spending Account Limits

Q. What is the maximum Contribution limit to a Health FSA for medical expenses beginning January 1, 2013?

A. $2500 increased annually by the cost of living adjustment.

 

Q. What is the limit if both spouses are enrolled in a Health FSA?

A. Each spouse may contribute $2500 even if both spouses participate in the same Health FSA under the same employer.

Q. Does the $2500 contribution limit apply to Flex Credits?

A. The $2500 limit does not apply to Flex Credits.

 

Q. Does the $2500 limit apply to contributions for dependent care assistance?

A. The law does not limit the amount of salary reduction contributions for dependent care assistance, an employee’s share of health coverage premiums, salary reduction or any other contributions to HSA’s, or to amounts made available by an employer to an HRA.

 

For IRS guidance and details on the $2500 limit and IRS FAQ go to http://www.irs.gov/pub/irs-drop/n-12-40.pdf

Here is a link to a Health Reform Implementation Timeline published by the Henry J. Kaiser Family Foundation Health Reform Resource – it’s a helpful list of which laws are being implemented, and when: http://healthreform.kff.org/timeline.aspx.

 

Your trusted advisors at Brigante, Cameron, Watters and Strong are here to help with the year-end planning that will ensure your business' growth and profitability in the coming year.

Information compiled by Bruce Langdon.

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