Hot Topics

• IRS Issues Updated W-2 Reporting Guidance
  The Health Care Reform law requires employers to report the cost of employer-sponsored health care coverage on employees' W-2 Forms beginning with the 2012 calendar year (that is, for the Form W-2s required to be issued by January 31, 2013). Last year, the IRS issued interim guidance on the W-2 reporting requirements in question and answer form in Notice 2011-28. On January 3, 2012, the IRS issued additional guidance in Notice 2012-9 . The new guidance clarifies and restates the original guidance (Notice 2011-28 is superseded), and adds several new questions and answers. Employers may want to review their course of action to determine if it is still on target. Click here for a list of key changes.
• HHS gives states flexibility to define the required essential health benefits.
  On December 16, 2011, the Department of Health and Human Services (HHS) issued a bulletin outlining a proposal to give states flexibility to define the required essential health benefits. Under the HHS proposal, states would be able to define essential health benefits in their states for the years 2014 and 2015 by reference to a "benchmark" plan reflecting the scope of services offered by a "typical employer plan".
• Summary of Benefits and Coverage Possibly Delayed
  Recently issued agency FAQs clarify that plan sponsors and insurers will not be required to distribute the Summary of Benefits and Coverage (SBC) or Uniform Glossary until some time after final regulations are published. Under the proposed regulations, plan sponsors and health insurers were to begin distributing SBCs beginning March 23, 2012. The new guidance was issued in response to concerns that the March 23, 2012 compliance date did not give plan sponsors and issuers sufficient time to prepare and could lead to SBC "do-overs" – the unappealing prospect that SBCs based on the proposed regulations might need to be revised to comply with final regulations. For more information about the SBC requirements, click here.
• HHS Announces Updates to the State Exchange Establishment Grants
  On November 29, 2011, the Department of Health and Human Services (HHS) issued a news release announcing updates to the state Exchange Establishment grants which assist with the development of state-based Exchanges. Specifically, the release summarizes additional Level 1 Establishment grants, notes the first Level 2 Establishment grant, and includes an 8-page list of FAQs describing the variety of ways in which States will have increased flexibility to manage Exchanges. The FAQs extend the deadline for applying for Level 1 grants from December 30, 2011 to June 29, 2012.
• Supreme Court to Rule on Health Care Reform Challenge
  On November 14, 2011, the Supreme Court announced that it will hear the case challenging the Health Care Reform law, commonly known as Florida vs. HHS. The key issue among others is the constitutionality of the individual mandate. The Supreme Court scheduled 5-1/2 hours of arguments instead of the usual
  one hour – arguments are expected in March 2012 with a decision expected by late June 2012.
• Get ready for new W-2 reporting requirement
  Beginning with the 2012 tax year, the Health Care Reform law will require employers that filed 250 or more W-2 Forms in the previous year to report the cost of employer-sponsored health care coverage on their employees' W-2 Forms. Click here to find information on how to calculate the amount that must be reported, including a worksheet for you to use.
• Summary of Benefits and Coverage and the Uniform Glossary are published by agencies
  On August 22, 2011, the agencies published proposed regulations explaining when and how plan sponsors must distribute two new disclosure documents – the Summary of Benefits and Coverage (SBC) and the Uniform Glossary. In addition, the agencies released template versions of the SBC and Uniform Glossary prepared by the National Association of Insurance Commissioners. Plan sponsors (or their health insurance carriers) must begin distributing the SBC by March 23, 2012. An SBC may be distributed in paper or electronic form, and distribution is required with enrollment materials, following a special enrollment event, and upon request. The Uniform Glossary may also be distributed in paper or electronic form, but distribution is required only upon request. The agencies are expected to issue further guidance later this year or early next year.

Caution:

The information provided here is only a brief summary that reflects our current understanding of select provisions of the law, often in the absence of regulations. All interpretations are subject to change as the appropriate agencies publish additional guidance. American Fidelity does not provide legal advice – as such, we suggest that employers and individuals consult with their legal counsel and/or tax advisors about how Health Care Reform may impact them.