With the re-election of President Barack Obama, Healthcare Reform is now on full steam ahead with timelines and new regulations to come. In order to keep all of our clients up to date with the most accurate deadlines, Martin and Martin Insurance will be communicating come each date the new regulations. In this first communication, we are going to cover the entire year of 2013. Please note these could change and that there could be additions as Congress approves new regulations.
ü Effective 01/01/2013 medicare withholding tax will increase from 1.45% to 2.35%
- Applies to employment income in excess of $250,000 if married or $200,000 if single.
- Medicare tax on self-employment income will increase from 2.9% to 3.8%
- 3.8% medicare tax imposed on net investment income for taxpayers with modified adjusted gross income over $250,000 if married or $200,000 if single.
ü Effective 01/01/2013, Health FSAs are limited to $2,500 (subject to annual indexing for inflation)
- Limit applies only to employee salary deferrals and not to employer non-elective FSA contributions.
- An employee covered under a qualified HDHP with an HAS can use the HAS for qualified medical expenses; see definition under IRC 213.
- IRS has said cafeteria plan documents do not have to be amended immediately, but just before the end of the 2014 calendar year.
ü On 01/01/2013, HHS will evaluate each state’s progress in establishing its health insurance exchange. If progress is deemed insufficient, HHS can step in to establish and run the states exchange effective 01/01/2014.
- The exchange applies to the individual and small group markets (<100 employees) initially; employers > 100 employees can join exchange in 2017.
- Its too early to know which carriers will participate in each state’s exchange with plans will be offered and how much exchange based coverage will cost.
ü For W-2s to be issued in January 2013 (i.e. 2012 Tax year), employers issuing more than 250 W-2s will be required to report the aggregate cost of employer-sponsored health care coverage on their employee’s W-2s.
- This does not mean the value of health coverage will become taxable income
- Does not apply to Health FSAs if contributions only occur through salary reduction
- Does not include Dental and/or Vision coverage that is considered limited scope or unbundled from Medical/Rx benefits
- Does not include costs under an EAP, wellness program or on-site medical clinic if the employer does not charge a premium for that coverage under COBRA.
ü On 03/01/2013, employers will need to provide their employees notice about the future availability of a health insurance exchange in their state.
ü By 7/31/2013, insured and self-funded plans will pay $1/member to fund comparative effectiveness research of medical treatments by the new non-profit Patient Centered Outcomes Research Institute.
- This requirement took effect 01/01/2012 for calendar year plans
- Employers will use revised IRS Form 720 to remit the fees
- Fees for plan years beginning in 01/01/2013 will be $2/member
ü By 12/31/2013, group health plans must certify they are in compliance with HHS rules on electronic transactions between health providers and health plans.