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Health fexible spending arrangement contribution limit
The ACA will limit the amount of participant pre-tax dollars that can be used to cover health
expenses through fexible spending accounts (FSAs). FSA participants will have a salary
reduction limit of $2,500 for plan years beginning on or after January 1, 2013.
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W-2 reporting requirement
All employers that issued at least 250 Form W-2s in 2011 will need to report the value
of health care coverage that employees participated in during the 2012 plan year on the
employee’s Form W-2. Some items, such as stand-alone dental, vision, and health savings
account contributions, are excluded from this reporting requirement. Although the value must
be reported, it is not taxable for the business or employee.
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Future regulatory guidance could
require small businesses with fewer than 250 employees to meet the W-2 requirement.
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Medicare retiree drug subsidy tax deduction eliminated
Employers will no longer be able to deduct retiree drug expenses for which they receive a
Medicare Part D retiree drug subsidy payment.
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Notice about state health insurance exchanges
Employers subject to the Fair Labor Standards Act are required to notify employees of state
health insurance exchanges and potential eligibility for premium credits. Each U.S. state
must establish a health insurance exchange by January 1, 2014, that provides a marketplace
for individuals and small employers. The U.S. Department of Health and Human Services
(HHS) will operate a federally-facilitated exchange (FFE) for states that do not establish an
exchange, and premium tax credits will be available for those who buy individual coverage in
an exchange.
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The Kaiser Family Foundation offers additional information about exchanges at
kff.org; however, no guidance has yet been provided by DOL for this requirement.
Play or pay
Employers with at least 50 full-time employees must offer minimum essential health coverage
to their full-time employees or face a penalty.
4
For more information about penalties, see
Appendix Chart 1.
Penalties
$2,000:
If the employer does not offer minimum essential to all full-time (30 hour)
employees, and at least one employee obtains a premium subsidy through an
exchange, the penalty is $2,000 per year, per full-time employee, excluding the
frst 30 employees.
4
Note: This calculation is also used as a cap for employers offering coverage that is considered unaffordable
or does not meet the minimum value standards (see $3,000).
$3,000:
If an employer offers coverage that is considered unaffordable or does not
meet minimum value standards, the fne is calculated as $3,000 for each full-time
(30 hour) employee purchasing coverage through an exchange and receiving federal
Important Date 1:
January 1, 2013
Important Date 2:
March 1, 2013
Important Date 3:
January 1, 2014