Changes for Your Health Plan: Do you want the good news or the bad news first? By Kimberly I. McCarthy, Esq.

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The good news: IRS has delayed one of the thornier provisions of federal health reform that would affect all employers: changes to W-2 reporting requirements.

The bad news: Employers may well have to change the way they offer and pay for health insurance to their officers, executives, and owners – including through provisions in their employment or severance agreements, rather than through their health plans - in the next few months.

W-2 Reporting Change Delay

The federal health care reform law contains a provision that requires employers to include the cost of the employer-paid portion of health insurance on their employees’ 2011 W-2s. The change in reporting does not change how employer-provided health benefits are taxed, but instead is intended to show employees the value of health insurance as an employee benefit. While this is a worthwhile goal, changing W-2 reporting is an administratively difficult and potentially costly change to payroll processing.

Recently, the IRS announced that it will waive the new W-2 reporting requirement for one year. Now, health care cost information will have to be reported beginning with the 2012 W-2s, which are issued in 2013.

Expanded Nondiscrimination Rules

Many employers offer/pay for different benefits to different groups of employees.

Please see full article below for more information.

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Tax

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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