Please Note: None of this should be taken as legal or tax advice and individual research and the work of a qualified tax professional should be consulted.
During some recent client discussions the topic of taxation of benefits has come up so I thought a quick update would be beneficial today. Per my research, the recent as March, the IRS has issued some interim guidance to small businesses on the new annual W-2 reporting requirements as created under the Affordable Care Act. This act generally requires all employers to report the cost of employer-provided health care coverage on the Form W-2.
However, in the recent guidance the IRS made
this requirement optional for all employers for 2011. Then the March guidance provided additional pull back for small employers (those with less than 250 employees who must file a W-2). The IRS as again moved the requirement back, as optional for this group of employer to 2012.
The IRS emphasized that the new reporting on employee W-2s is for information purposes only, and does not required that employer-provided health coverage to become taxable. However, most analyst consider this the first step down that path.
At this point, the IRS is requesting comments on this interim guidance. It seems like a good policy / practice for employers to contact their representatives on this issue to have their opinions heard.
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Federal oversight of your state insurance exchange Announced on April 15, 2011
You probably do not review the Federal Register for updates on the Patience Protection & Affordable Care Act, (“PPACA”), but I do. The latest announcement on the implementation of this law was posted on April 15, 2011.
According to the notice published, the Centers for Medicare and Medicaid Services (“CMS”) will develop the Health Insurance Assistance Database, which is a new system of records to oversee the development and operation of health insurance exchanges. These exchanges are part of PPACA changes imposed on the health insurance market. The exchanges are intended to be a web portals enabling individual consumers and businesses to compare and purchase medical insurance coverage. This is one part of the law I like. Creation of markets for consumers is a good thing.
CMS per the notice, will enforce federal standards and PPACA provisions for the exchanges and will set up exchanges in states that do not build their own. The CMS, Center for Consumer Information and Insurance Oversight announced it will build a new database to track information for oversight (“enforcement”) purposes. For example, the database will collect information on consumer inquiries and complaints regarding their exchanges. Then, CMS will have the enforcement authority over non-federal governmental health plans, (your state or private plans) and will be authorized to investigate whether states are enforcing provisions of PPACA and the Public Health Service Act.
The more you read about this law, it sound more like a federal takeover of the insurance market. Do you think we will get more doctors and healthcare or more investigators, lawyers, auditors and red tape?
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Spring is here, so Make being Healthy a Family Event!
Share your healthy ideas!
A good way to encourage healthy habits over the long term is to make it a family event. Spring is here so why not get outside and together and exercise daily. It is not that difficult to come up with some fun for the whole family. Just remember how you were when you were growing up. Kids today get much less physical exercise than we did. Get the basketball pumped up and play around of HORSE. If you have two balls, run dribble relays and some lay ups. Of course, make sure everyone is cleared by your health professional before starting any physical program. I have to say that to protect myself, but it always sounds silly to me. Don’t forget as it gets warmer, you need more hydration. If you want to make it fun for the kids, try the fruit flavor water tip at the end of this post.
Here are some simple exercise tips:
- While you are power walking or going for a jog, invite your kids to ride their bikes, or rollerblade by your side.
- With the beginning of spring you will see the sign up for outdoor tennis or swimming. Sign the family up for some lessons. A new adventure rock climbing or explore the trails at a state park near you.
- Make birthdays and other family events more active. Give gifts like balls and gloves, rackets and clubs your hallmark. Promote active lifestyles and lead by example.
- Plan your outings. Park walks, pick up games, football, softball, tennis tournaments. Even family frisbee night will promote cardiovascular health.
- As the weather improves, get the whole family to work the garden, dig the holes, cut the grass and lift the bags of chips or top soil. All physical activity burns calories and strengthens muscles.
If you cannot organize it by yourself start a block event with the neighbors, or at least ask to join in if they already have a game going.
Fruity Frozen Ice Cube Water
- Pour your favorite 100% fruit juice in some dollar store ice cube trays and freeze
- Put 4 to 5 fruit juice cubes in a glass
- Fill with fresh filter water
Create your own special favor drinks. Try some fruit juices that mix together well like mango and orange. They look colorful and fun. Your kids will run not walk to find out what you made each time.
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The will of the People cannot be ignored.
I am sure many small businesses cheered today as they read that President Barack Obama signed the first of many repeal bills on the unpopular Patient Protection and Affordable Care Act (“PPACA”). This repeal focused on the overly bureaucratic and burdensome FORM 1099 Tax Reporting mandate for business. The repeal passed both the House and Senate this week with bipartisan support leaving the President little political choice but to pull back from this portion of his signature legislative victory. This 1099 reporting mandate was passed last year as part of the PPACA law, as a way to partially offset the cost of this massive federal mandate requiring individuals to purchase healthcare funded largely by the government. Most analyst also believe this reporting requirement was a first step toward the taxation group healthcare benefits sponsored my private employers.
From the very beginning this portion of the PPACA law, along with many other portions of the reform was met with a chorus of disapproval as it greatly increased the paperwork burden (and expense) for businesses.
With the change in the make up of the Congress during the last mid-term election and the Presidential campaign for the 2012 election just underway, we should expect similar smaller changes to the PPACA law, as Congress and even the President pull back from a largely unpopular reform.
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