Now that the Supreme Court has weighed in, the Affordable Care Act (ACA) is the law! The countdown is on until 2018 when the final provisions take effect. Time to start your annual compliance planning.
Here, for example, is a (brief?) summary of what you and your organization will face in 2013:
Health Insurance Administration Simplification
During 2013 and on to 2016, HHS is to develop uniform standards to reduce the clerical burden on patients, healthcare providers, and health plans.
A health plan must comply with the new requirements by the effective date of the applicable standard or operating rule.
By April 1, 2014, and annually thereafter, HHS will assess a fine for noncompliance of up to $1 per covered life per day of noncompliance.
By December 31, 2013, a health plan must file a statement with HHS certifying that the data and information systems for the plan are in compliance with any applicable standards and associated operating rules for electronic funds transfers, eligibility for a health plan, health claim status, and healthcare payment and remittance advice.
Medicare Tax
Effective for wages received during taxable years beginning after December 31, 2012, the Medicare Part A (hospital insurance) tax rate on an individual’s wages goes up by 0.9 percent (from 1.45 percent to 2.3 percent) on earnings over $200,000 if the individual files his or her federal income tax return as a single taxpayer and $250,000 if the individual files as married filing jointly.
There is also a new 3.8 percent Medicare tax assessment for a taxable year on investment income from interest, dividends, royalties, rents, gross income from certain trade or businesses, and net gain from disposition of property. The tax applies to individuals earning over $200,000 and on married couples earning over $250,000.
Trade or business income is subject to the tax if the trade or business is a passive activity or is trading in financial instruments or commodities. Net investment income does not include any distribution from a qualified retirement plan or self-employment income.
Supreme Court says … Comply with complex healthcare reform requirements in 2013 and 2014. Common sense says, download BLR’s just-updated Healthcare Reform—Countdown to 2014.
FSA Contribution Limit
Effective for plan years beginning on or after January 1, 2013, contributions to an FSA for medical expenses are limited to $2,500 per year, increased annually by the cost-of-living adjustment.
The IRS provided the following transitional relief for applying the new limit:
- Plans may adopt the required amendments to reflect the $2,500 limit at any time through the end of calendar year 2014.
- In the case of a plan providing a grace period (which may be up to 2 months and 15 days), unused salary reduction contributions to the health FSA for plan years beginning in 2012 or later that are carried over into the grace period for that plan year will not count against the $2,500 limit for the subsequent plan year.
Elimination of Tax Deduction for Part D Subsidy Payment
Effective January 1, 2013, the tax deduction for employers that receive Medicare Part D retiree drug subsidy payments is eliminated.
Healthcare Reform—every employer’s nightmare in 2013 and 2014! Be sure you know what is required each year. Download BLR’s just-published Healthcare Reform—Countdown to 2014.
Requirement on Employers to Inform Employees of Coverage Options
Employers are to provide to each employee at the time of hiring (or for current employees, not later than March 1, 2013) written notice informing the employee of the existence of an Exchange, including a description of the services provided by such an Exchange and how the employee may contact the Exchange to request assistance.
Healthcare reform. The Supreme Court says it’s not going away and that means every employer has a long list of tasks to do, especially in 2013 and 2014.
You must be certain you are prepared to follow the complicated time line for total compliance. Fortunately there’s expert guidance available in BLR’s just-published Healthcare Reform—Countdown to 2014. This report starts with a quick summary of all the provisions followed by detailed year-by-year analysis so that all of your questions on this complex law are answered.
Topics covered:
- What Happens & When
- Limits and Restrictions
- Grandfather Rules
- Conditions – Active Employees and Retirees
- Tax Credits and Liabilities
- Tests and Recordkeeping
Be sure you know what happens & WHEN! Download this vital report now.
It’s amazing that some employers still seem to be sticking their heads in the sand on this, and yet they are. Failing to take action in hopes that the law will be repealed is just foolish at this point.