Other Employer Provisions

Changes to health flexible spending accounts

Effective for plan years on or after January 1, 2013, contributions to a health flexible spending account will be limited to $2,500 per person per year, indexed in accordance with changes in the Consumer Price Index.

Reporting on W-2 forms

Employers must report the value of health coverage on the W-2 form for all employees in 2012, including part-time employees. However, employers that file fewer than 250 Form W-2s are currently exempted. The IRS is planning to develop regulations implementing this provision. The reporting on the W-2 does not mean that the value will be taxed. The reporting is only meant to show the value of health insurance coverage.

Reporting health insurance information to IRS

Beginning in 2015, large employers must report the following information to the IRS:

  • Identification of full-time employees for each month;
  • Whether full-time employees and their dependents are offered minimum essential coverage;
  • The monthly premium for the lowest cost option;
  • The length of the waiting period; and
  • The employer’s share of the total allowed costs.

This applies to coverage in effect January 2014. Proposed rules implementing this provision have not yet been published.

90 day waiting period

Health insurance plans can no longer apply a waiting period longer than 90 days. The waiting period means the time between when an employee is eligible for coverage and coverage begins. The 90 day period can be coordinated with the measurement period and stability period for new variable rate employees so these individuals may see longer waiting periods. Additional regulation is expected in this area, but the guidance is in effect until the end of 2014.

Auto enrolling new employees

For employers with more than 200 employees who offer health insurance coverage, they must auto enroll new employees and give notice that the employee can opt out. This requirement could go into effect as soon as the Secretary of the Department of Health and Human Services issues regulations.