This article covers significant developments in late 2010 and 2011 in employee benefits, including employment taxes, executive compensation, health and welfare benefits, and qualified plans. Part I focuses on guidance released and changes to the rules for employment taxes and executive compensation.
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Affordable Care Act (ACA)
Health Care Premium Credit Rules Proposed
The IRS released proposed regulations implementing the health insurance premium tax credit, which is effective starting in 2014.
IRS Will Allow Costs of Breast Pumps as Deductible Medical Expenses
The IRS has announced that it will treat expenses for breast pumps and supplies that assist in lactation as deductible medical expenses, and that the amounts that a taxpayer is reimbursed for these expenses will not be income to the taxpayer.
IRS Issues First Guidance on Nonprofit CO-OP Health Insurers
The IRS issued its first guidance on the requirements for new qualified nonprofit health insurance issuers under Sec. 501(c)(29) and has requested comments on specific issues.
Final Form and More Guidance on Small Business Health Care Tax Credit
The IRS released a new form and guidance relating to the small business health care tax credit for the 2010 tax year. The guidance discusses issues relating to employers’ eligibility for the credit and other eligibility issues.
Health Care Insurance Mandate Held Unconstitutional
A federal district court has held that the health care reform legislation’s mandate that individuals obtain health insurance is unconstitutional. In so holding, however, the court severed that mandate from the rest of the health care reform legislation and refused to enjoin enforcement, pending appeal of the case.
Individual Insurance Mandate Held Unconstitutional Again
A second federal district court has held that the individual insurance mandate in the health care reform legislation is unconstitutional.
IRS Guidance on FSA and HSA Reimbursements for OTC Drugs
The IRS has issued guidance implementing the Patient Protection and Affordable Care Act’s prohibition on reimbursement of the cost of over-the-counter drugs by HSAs, HRAs, Archer MSAs, and FSAs, which allows reimbursement for an OTC drug only if the individual has a prescription for the drug.
Form W-2 Reporting Requirement Extended for Employer-Sponsored Group Health Plans
The IRS announced that employers will not be required to report the cost of employer-sponsored coverage on Forms W-2, Wage and Tax Statement, issued for 2011, due to the difficulty in preparing payroll systems for the requirement.
Federal Court Rules Health Care Insurance Mandate Unconstitutional
A federal district court has held that the health care reform legislation’s mandate that individuals obtain health insurance is unconstitutional.
IRS Releases Form and More Guidance on Small Business Health Care Tax Credit
The IRS released a new form and guidance relating to the small business health care tax credit for the 2010 tax year.
IRS Delays Mandatory W-2 Reporting of Health Care Coverage Costs
The IRS issued interim relief to employers regarding reporting the costs of group health plan coverage to employees. Under the notice, notification to employees on Form W-2 will not be required for 2011.
Current Developments in Employee Benefits and Pensions (Part I)
This article covers significant developments in late 2009 and 2010 in employee benefits. Part I discusses employment taxes, including the Hiring Incentives to Restore Employment Act and medical resident FICA refund claims, and provides an overview of the new health care reform legislation, focusing on guidance released and provisions that require immediate employer-related changes.
Temp. Regs. Explain New Health Plan Requirement to Provide Preventive Services Without Cost Sharing
This item details the cost-sharing requirements relating to coverage of preventive health services mandated by the Patient Protection and Affordable Care Act.
Draft Form for Small Business Health Insurance Credit Released
The IRS has issued a draft form (Credit for Small Employer Health Insurance Premiums) for businesses to use in figuring and claiming the new small business health insurance credit, starting this year.
Mandatory Reporting of Health Care Coverage Costs Delayed by IRS
The IRS issued a notice providing interim relief to employers regarding reporting the costs of group health plan coverage to employees.
The Health Insurance Credit for Small Employers
Beginning in 2010, the Patient Protection and Affordable Care Act provides a credit to small employers who contribute to the purchase of health insurance for their employees. This item explains and illustrates the computations.
Draft Form 8941 Health Insurance Credit for Small Businesses
The IRS issued a draft form for businesses to use in figuring and claiming the new small business health insurance credit.
Health Care Legislation Requires New Planning Strategies
Two areas that practitioners should examine for opportunities to reduce the impact of Medicare tax increases on their clients are the structure of privately owned businesses and holdings in passive investment activities.
Health Care Appeals and Review Regulations Issued
The IRS and the Departments of Labor (DOL) and Health and Human Services issued interim final regulations and proposed regulations governing how individuals can appeal medical coverage or claims denials by their health insurer.
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