Q.- We are changing our health plan eligibility for the new plan year. We will no longer offer medical coverage to spouses if they are eligible for and have medical benefits at their own employer. Do COBRA notices need to be issued if the spouse has coverage through his or her own employer? There is one spouse of an employee who does not work and is getting coverage on her own. Does a COBRA notice need to be issued to her? There is one spouse of an employee who is employed but is not eligible for benefits in her work place. Do we have to give her a COBRA notice?
The IRS issued a Chief Counsel Advice Memorandum describing when an employer can reimburse an employee on a tax-free basis for the cost of health coverage provided by a spouse’s employer.
Large employers with 50 or more employees, and smaller employers with self-funded health plans, should be prepared to report health coverage and offer of coverage information to individuals and the IRS in early 2016.
Q.- We are a large employer with a self-funded health plan. Do we have to send an ACA Form 1095-C to our former employees on COBRA coverage? What if just their dependents elected COBRA?
The IRS released the 2015 version of Form 5500, with only a few minor changes from the 2014 version. Form 5500 is the annual information filing for pension benefit plans and for welfare plans with 100 or more participants.
As BAS is working with clients in the final hours of data collection for Affordable Care Act (ACA) compliance, we have come across several items that may apply to many employers.
Q.- Many of our employees are not going to use their full FSA balances. Can we refund the money to them if we withhold taxes?
The IRS issued proposed regulations implementing recent Supreme Court decisions about same-sex marriages. The proposed regulations amend IRS rules to require that for federal tax purposes, any mention of marriage indicating sex, such as “husband” and “wife” include both same-sex and opposite-sex spouses. These terms would be interpreted to mean an individual lawfully married to another individual. The regulations also would provide that a marriage of two individuals will be recognized for federal tax purposes if the marriage would be recognized by any state, possession or territory of the United States.