Benefits Bulletin

The IRS has set the 2014 Health Savings Account contribution limits:

For those with single HDHP coverage, the 2014 maximum HSA contribution is $3,300 (compared to $3,250 in 2013).

For those with family HDHP coverage, the 2014 maximum HSA contribution is $6,550 (compared to $6,450 in 2013).

The 2014 maximum out-of-pocket expense for a qualified High Deductible Health Plan has also been set:

For those with single HDHP coverage, the 2014 maximum out-of-pocket expense is $6,350 (compared to $6,250 in 2013).

For those with family HDHP coverage, the 2014 maximum out-of-pocket expense is $12,700 (compared to $12,500 in 2013).

In 2012, the IRS released Notice 2012-9 (http://www.irs.gov/pub/irs-drop/n-12-59.pdf) to explain the 90-day waiting period limitation under Public Health Service Act Section 2708.  These regulations were jointly updated on March 14, 2013 by the Internal Revenue Service and the Departments of Labor and Health and Human Services (http://www.irs.gov/PUP/newsroom/REG-122706-12.pdf).  The outcome is a provision in the Patient Protection and Affordable Care Act that states group health plans will not be permitted to apply any waiting periods that exceed 90 consecutive calendar days.

A waiting period refers to the period that must pass before an otherwise eligible employee or dependent can obtain coverage under a group health plan.

This applies to plan years beginning on or after January 1, 2014.  This applies to all group health coverage regardless of financial arrangement, group size or grandfathered status.

Plans currently requiring waiting periods of more than 90 days will need to modify their eligibility waiting period rules to adhere to the 90-day maximum.  Waiting periods may not extend beyond 90 calendar days, with all calendar days, including weekends and holidays, counted.  Plans that have waiting periods effective the first day of the month after the 90-day waiting period must change their rules so that the waiting period does not exceed 90 consecutive calendar days.

More information can be found at:

• http://www.irs.gov/PUP/newsroom/REG-122706-12.pdf
• http://www.irs.gov/pub/irs-drop/n-12-59.pdf
• http://www.dol.gov/ebsa/newsroom/tr12-01.html

As a requirement of the Patient Protection and Affordable Care Act (PPACA), all employers are required to notify all employees about their healthcare options available through the Health Insurance Exchanges.

Originally scheduled for March 1, 2013, this Exchange Notice has been delayed until late summer or fall of this year.

The first section of a FAQ issued on January 24, 2013 by the Department of Labor (http://www.dol.gov/ebsa/faqs/faq-aca11.html) confirms that employers will not be required to provide the Exchange Notice to their employees until critical information is defined, including:

• The DOL is expected to issue regulations on the Notice
• The IRS is expected to provide guidance on minimum value
• Information on HHS’ educational efforts

The FAQ also notes that, in the future:

• Employers will be provided with model, generic language for the Exchange Notice
• An alternative template will be available for download on the Exchange website

The Exchange Notice is meant to:

• Inform employees about the existence of the Exchange and give a description of the services provided by the Exchange
• Explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements
• Inform employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of this employer contribution may be excludable for federal income tax purposes
• Include contact information for the Exchange and an explanation of appeal rights

This Exchange Notice is required to be sent out by employers of all sizes, to all employees, regardless if the employee currently has insurance, or if the employer currently offers insurance.

More information can be found at:

http://www.dol.gov/ebsa/faqs/faq-aca11.html

This is an update to our Benefits Bulletin published in January 2011.

In January 2012, the IRS released Notice 2012-9 (http://www.irs.gov/pub/irs-drop/n-12-09.pdf) which further explains a Health Care Reform provision that will require employers to report the cost of health care coverage on employees' W-2 wage and income statements. 

Since then, clarification has been given on exactly what health care cost information will have to be reported on 2012 W-2s, and who this pertains to. 

An employer who was required to file fewer than 250 Forms W-2 for 2012 will be exempt from the reporting requirement for 2013. 

• The cost of the employer-sponsored health care to be reported includes any dependents, even if included in the employee’s gross income.  This is also true for domestic partners or same-sex spouse coverage.
• It is important to note that although these figures will appear on Form W-2, these figures are not part of employees’ taxable income.
• The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable.  This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. 

More information can be found at:

http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage