Employer Reporting Requirements
Notice of Coverage Options. Not later than March 1, 2013, employers must provide a written notice to newly-hired and current employees informing employees: 1) that healthcare exchanges are available, the services provided by the exchange, and how to contact the exchange; 2) if the employer pays less than 60% of the costs of benefits, that the employee may be eligible for a premium tax credit and a cost-sharing reduction if the employee purchases health insurance from an exchange.
Reporting Cost of Employer-Sponsored Health Coverage on W-2. Effective January 1, 2011, an employer will be required to report the aggregate value of medical benefits, dental, vision, and supplemental insurance coverage on the Form W-2 that is provided to each employee annually.
Uniform Explanation of Coverage. By March 23, 2012, group health plans and sponsors of self-insured health plans must provide participants a uniform summary of benefits and coverage. The uniform summary cannot be longer than four pages and must describe the health benefits offered under the plan, limitations on coverage, cost-sharing provisions, and any restrictions on continuation of coverage. Failure to provide this summary will result in a $1,000 fine per failure.
Annual Reports. Effective for 2014, employers with 50 or more full-time employees must file an information return in a form to be established by the Secretary of the Treasury containing 1) the employer’s name and employer identification number, 2) a certification as to whether the employer offers to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, 3) the number of full-time employees for each month during the calendar year, 4) the name, address and TIN of each full-time employee during the calendar year and the months during which such employee was covered under a health plan
1099 Reporting Change Effective January 1, 2012 a majority of business payments will need to be reported on a 1099. Taxpayer ID numbers will need to be collected for all vendors including such expenses as meals and hotel rooms.
Plan Design Changes
Extension of Dependent Coverage. Group health insurance plans and self-insured plans that offer dependent coverage must allow dependent coverage to continue for an adult child up to age 26. For plan years beginning before 2014, this mandate is limited to adult children who are not eligible for other employer-group health plan coverage.
No Lifetime or Annual Limits. Effective for plan years beginning on or after September23,
2010, a group health plan or self-insured plan may not impose a lifetime dollar limit on
“essential health benefits”, and must phase out annual limits on “essential health benefits”
coverage through 2014, when annual limits will be prohibited.
No Pre-existing Exclusions. Effective for plan years beginning on or after September 23, 2010, no group health plan or self-insured health plan may impose pre-existing condition exclusions for children under 19 and must completely eliminate pre-existing condition exclusions for participants of any age by January 1, 2014
Waiting Periods Limited. Effective January 1, 2014, waiting periods under a group health plan or self-insured plan cannot exceed 90 days.
No Reimbursement for Over-the-Counter Medications. Effective January 1, 2011, reimbursement for over-the-counter medications will no longer be permitted from health flexible spending accounts, health savings accounts or health reimbursement accounts
Penalty for Failing to Provide Health Coverage. Effective January 1, 2014,an employer with 50 or more full-time employees that does not offer minimum essential coverage and has at least one employee receiving a premium assistance tax credit or cost-sharing premium assistance will be required to pay an annual penalty of $2,000 per full-time employee, exempting the first30 full-time employees.
Penalty for Offering “Unaffordable” Health Coverage. Effective January 1, 2014, an employer that employs 50 or more full-time employees, offers minimum essential coverage and has at least one employee receiving a premium assistance tax credit or cost-sharing premium assistance will
be required to pay an annual penalty equal to the lesser of: 1) $3,000 for each employee who receives a credit or cost-sharing assistance because a) the employer pays less than 60% of the full actuarial value of the coverage provided or b) the employee’s premium is greater than 9.5% of his or her household income; or 2) $2,000 per full-time employee.
Free Choice Vouchers. Effective January 1, 2014, an employer that pays a portion of the premiums for health coverage will be required to provide “free choice vouchers” to certain low income employees who elect not to participate in the employer’s health plan. To be eligible for the free choice voucher, the employee must have a household income not exceeding 400% of the poverty level and is required to contribute between 8% and 9.5% of his household income toward the cost of the employer-provided health coverage. The “free choice voucher” is equal to the monthly portion of the cost of coverage that the employer would otherwise have paid if the employee was covered under the employer’s plan and is used by the employee to purchase healthcare coverage through an Exchange