Note: None of this should be taken as legal or tax advice.
As part of the
Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan.
Originally, W-2 reporting was intended to start with the 2011 tax year. However, the Internal Revenue Service (IRS) determined that employers needed additional time to update their payroll systems, so it made reporting optional for the 2011 tax year. Reporting will be required starting with the 2012 tax year, for which reporting begins in January 2013.
For employers that issue fewer than 250 W-2 forms, reporting will continue to be optional for the 2012 tax year and will only become mandatory for the 2013 tax year (for which reporting begins January. 2014).
The IRS issued a new notice this week,
Notice 2012-9 that restates and amends the interim guidance.
Note: None of this should be taken as legal or tax advice.
As part of the
Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan.
Last week,
the IRS issued a notice confirming that employers
are not required to include the cost of coverage under a
Health Reimbursement Arrangement (HRA) on employee W-2s. If the only coverage provided to an employee is an HRA, the employer is not required to report any amount on the Form W-2 for that employee.
According to
Notice 2012-9, the IRS is granting permanent relief to employers that sponsor HRAs:
"Q-18: Is the cost of coverage under a Health Reimbursement Arrangement (HRA) required to be included in the aggregate reportable cost reported on Form W-2?
A-18: No. An employer is not required to include the cost of coverage under an HRA in determining the aggregate reportable cost. If the only applicable employer-sponsored coverage provided to an employee is an HRA, the employer is not required to report any amount under §6051(a)(14) on the Form W-2 for that employee."
Click here to read the full notice.
Note: None of this should be taken as legal or tax advice.
Experts suggest that employers' use of consumer-driven health plans has increased due to rising health insurance costs.
What do you think?
Note: None of this should be taken as legal or tax advice.
Premium only plans (POPs) are a great way for small businesses to save on taxes. Section 125 of the IRS code allows small businesses to make a simple change to the company’s payroll process that reduces employees' taxable payroll. Every employees' premium contribution through a premium only plan (POP) can be deducted from the overall taxable payroll amount.
Here’s 8 benefits small businesses and employees can expect with a Premium only Plan (POP) plan:
- Lower Employer Taxes - Every small business owner needs to take advantage of every tax break they can find. By using a premium only plan (POP), small businesses immediately lower taxes, which means more cash. A reduction in payroll taxes can be quite significant for a small business.
- Lower Administrative Costs - Many group plans feature high administrative costs. With a premium only plan (POP), health benefits costs drop to just $6-12 per employee per month.
- Easy to Set-up - Setting up a premium only plan (POP) is simple and small businesses can administer it online via the payroll system.
- Happier Employees - When employees make more money, they end up happier. By offering employees the ability to use a premium only plan (POP), a small business is automatically putting more money into employees' pockets. Small Businesses can use this to attract and retain quality employees.
- Lower Employee Taxes - In addition to lowering the businesses taxes, employees will also save income taxes with a premium only plan (POP). When they become a member of a premium only plan (POP), they will see a reduction in FICA, federal and state taxes.
- Lower Insurance Costs - For employees who may have trouble making contributions towards their health plan, a premium only plan (POP) plan can allow them to save money on their health plan through the benefits of lower taxes. Even though the premium amounts may be the same as a regular plan, the tax savings that they will experience can help make up the difference.
- Better Coverage - Even though a premium only plan (POP) offers many dollar benefits, it does not skimp on the health benefits. Employees will enjoy full health coverage from a company that they can trust.
- More Take-Home Pay - One of the most popular benefits of a premium only plan (POP) is the ability for employees to take-home more pay each month.
An annual
California Employer Health Benefits Survey show that California health care costs are on the rise and the benefits are shrinking. According to the survey, the cost of employer sponsored health plans have risen 153.5% since 2002. This is 5 times faster than the increase of California’s inflation rate.
The survey also indicated that 36% of California firms said they were likely to raise the amount their employees would pay in 2012.
How does California compare to your state?
Click here to read the full article.
