HEALTH CARE REFORM

• Timeline of Events
• Grandfathering of Group Health Plans 
• 2012 Play or Pay Mandate 
• 2018 Excise Tax

OTHER COMPLIANCE UPDATES

• Health Savings Account Plan Limitations
• HIPAA Audit Program
• Final Regulations Issued on Medical Loss Ratio
• Supreme Court to Consider Legality of Health Care Reform Law
• FSA-HRA-HSA
• Transportation Fringe Benefit Limits 
• Standard Mileage Rates Issued
• COBRA Subsidy Ends
• Wisconsin Changes Definition of Dependent and Taxation 
• Health Savings Accounts Receive Favorable Tax Treatment in Wisconsin

OTHER YEAR END REMINDERS

• Dependent Care Regulations
• Annual Reporting Requirements
• Section 105(h) Nondiscrimination Requirements   
• Cafeteria Plan Nondiscrimination Requirements
• Disability Benefit Taxation
• Medicare Prescription Drug Improvement and Modernization Act 
• Group Term Life Insurance Imputed Income
• Domestic Partner Benefits

As the debate over the Affordable Care Act (the “Act) continues, several components of the law have been enacted over the last year and will continue to be implemented in coming years. Review the timeline of events.

As employers make changes to their plan’s benefits and contributions, the number of “grandfathered” plans has significantly decreased over the last year. Plans that lose that status must comply with additional provisions of the law.

The Play or Pay law requires that employers with 50 or more full-time equivalent employees must provide a minimum level of medical insurance for their employees. If organizations do not meet the government requirements, they must pay a penalty.

The government has imposed an excise tax or “Cadillac Tax” if a plan’s value is above the required maximum. 

The Internal Revenue Service (IRS) released the 2012 cost-of-living-adjusted HSA limits.

The Affordable Care Act established a uniform standard effective January 1, 2011 that applies to all tax-favored arrangements, such as flexible spending arrangements (FSAs), health reimbursement accounts (HRAs) and health savings accounts (HSAs).

The IRS issued final regulations on “qualified transportation fringe benefits” under Code Section 132. 

For employer-sponsored adoption assistance programs, the maximum amount excludible from an employee’s income in 2012 for the adoption of a child (both for regular and special needs adoptions) will be $12,650 (decreased from $13,360 in 2011).

Wisconsin tax law was changed to treat Health Savings Account (HSA) contributions and earnings as tax-free for state income tax purposes.

Sponsors of dependent care assistance plans are required to notify plan participants of the total tax-free benefit they received through the plan during the calendar year by January 31, 2012.

Welfare benefit plans that have 100 or more participants enrolled on the first day of the plan year are required to file a Form 5500s (and attachments) each year.

Cafeteria plans must meet certain nondiscrimination requirements to ensure highly compensated key employees do not receive a disproportionate amount of tax-advantaged benefit.

Employees who receive disability benefits (long-term or short-term) may be taxed on these benefits based on how the premiums are paid.

Internal Revenue Code Section 79 permits an employee to receive up to $50,000 of group term basic life insurance on a tax-free basis. The value amount over $50,000 must be added to the individual’s taxable income.