The most recent congressional agreement to extend government funding included a provision delaying the so-called Cadillac Tax for two additional years. The Cadillac Tax, created by the Affordable Care Act, imposes a 40% tax on the value of employer-provided health coverage above a certain dollar limit. The income from the tax is intended to help fund benefits for the uninsured.
Q.- We have an employee who will be enrolling in Medicare Part A in April and then plans to retire in June. How long will COBRA coverage be available to him and his spouse?
The Medicare Modernization Act requires employers with health plans that include prescription drug coverage to notify Medicare-eligible participants if the drug coverage is “creditable” or not. This means the employer must let participants know if the employer’s prescription drug coverage is expected to pay on average as much as the standard Medicare prescription coverage.
The Tax Cuts and Jobs Act eliminated the requirement for individuals to have health coverage. Employers, however, are still required to offer coverage to their full time employees. Employees may be confused when they receive their Form 1095 this year, and they may have questions about what the form means now that there is no more individual mandate.
Q.- We changed our health plan January 1, 2018. Do we have to give any communication or document to the plan participants?
The IRS released updated versions of Publication 502 and Publication 503.
Q.- An employee requested a reimbursement from his health FSA for the cost of a therapy session. The claim was denied. Why?
The United States Department of Labor has expanded the ability for small businesses to group together to purchase health coverage. Many employees working for small businesses do not have employer-sponsored health coverage. Historically, small businesses and sole proprietors have had few choices when it came to affordable health coverage.
Applicable large employers must distribute Form 1095 to each full-time employee and each employee with health coverage by March 31, 2018. Employers may distribute the Form 1095 electronically if certain procedures are followed.
A health flexible spending account provides employees the ability to use tax-free dollars to pay medical expenses not covered by health insurance. An employee who participates in a health FSA can contribute up to $2,650 during the 2018 plan year without the amount being subject to federal income tax, Social Security tax or Medicare Tax. The maximum contribution amount may be lower based on plan design.