Now that it’s certain Obamacare isn’t going anywhere, it’s time to make sure you’re gearing up for a slew of new requirements.
Even before the individual mandate takes effect in 2014, there are a number of major requirements scheduled to take effect in 2013.
Here’s what you need to be prepared for — and what you need to be ready to communicate to employees:
- Increased limit on essential health benefits. For plan years beginning Sept. 23 or later, the annual dollar limit on “essential health benefits” must be no lower than $2 million. This is up from $1.25 million.
- Flexible spending account (FSA) limit. Employees’ contributions to their FSAs must be limited to $2,500. This takes effect Jan. 1.
- Medicare tax increase. The Medicare tax on wages will increase by 0.9% for high-income earners. High-income earners are those making more than $200K per year individually and $250K if married filing jointly. This impacts W-2 withholding and takes effect Jan. 1.
- No retiree prescription drug deduction. Employers cannot take a tax deduction for subsidized retiree prescription drug expenses. This takes effect Jan. 1.
- W-2 reporting. Employers issuing 250 or more W-2 forms have to include the value of each individual’s health plan benefits on their forms. The deadline for issuing these amended W-2s is Jan. 31.
- Notice of state exchanges. All employers (regardless of their grandfathered status) must provide a notice to employees of the availability of insurance through state exchanges. The notices must explain three things: 1) health coverage will be available through state-wide exchanges, 2) if the employer plan’s share of the cost of healthcare coverage is less than 60% of the total costs, an employee may be eligible for a tax credit and cost-sharing reductions to help pay for insurance purchased through an exchange, and 3) depending on an employee’s household income, a federal income tax credit might be available to help pay the premiums for insurance purchased through an exchange. The notices must be given to employees no later than March 1.
- Comparative effectiveness fee. For plan years ending on and after Oct. 1, 2012 through Sept. 30, 2019, all employer health plans must pay an annual fee to support “patient centered outcomes research.” For calendar-year plans, this means the fee applies to your 2012 plan year. The fee is $1 per covered life the first year, and it doubles to $2 in the second plan year. It’s then adjusted for inflation during the final five years. Fees for the previous year are due July 31 every year. So for calendar-year plans, the fee for 2012 is due July 31, 2013.
In addition, many companies are already distributing the new summaries of benefits and coverage the law requires for plan years starting on or after Sept. 23, 2012.