Q.- We are a religious organization. Do we have to count hours and send an Affordable Care Act 1095 Form to our religious employees?
The IRS released an updated version of Publication 502- Medical and Dental Expenses- that should be used for filing 2019 tax returns. Publication 502 explains the itemized deduction for medical and dental expenses that may be claimed on Schedule A of Form 1040. It addresses what expenses, and whose expenses, a taxpayer can and cannot include in figuring the medical expense deduction.
The IRS updated Publication 5187, “Affordable Care Act: What You and Your Family Need to Know.” The publication explains the Affordable Care Act and what individuals should understand about how ACA impacts them. It is presented in a Question and Answer format with questions addressing the individual shared responsibility requirement, enrolling in health coverage, the premium tax credit and changes to ACA requirements for 2019. The document also explains the 1095-B and C forms that individual may receive from their employers and/or insurers.
The U.S. Department of Labor has a useful website for employers of all sizes. Employer.gov provides employer resources and provides answers to common questions about workers and business.
Q.- An employee had a baby and returned to work on a part-time basis. She lost her eligibility for health coverage and will have a COBRA election. Can she pay her COBRA premiums pre-tax through payroll deductions?
California joins DC and New Jersey in requiring residents, starting this year, to maintain individual health coverage. California residents who do not have health coverage or do not qualify for an exemption will be subject to state tax penalties.
Q.- An employee’s daughter is aging off of our health plan. The daughter will be continuing coverage under COBRA. Can our employee pay for his daughter’s COBRA premiums on a pre-tax basis?
The IRS released Notice 2020-05 identifying the optional standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.
The Tax Cuts and Jobs Act reduced the Affordable Care Act individual shared responsibility payment to $0.00 starting with the January 1, 2019 tax year. The IRS has announced that Form 1040 will no longer have the “full-year health coverage or exempt” box and Form 8965- Health Coverage Exemptions- will no longer be used. A taxpayer does not have to make a shared responsibility payment with a tax return if the taxpayer does not have minimum essential coverage for all or part of 2019.
Q.- Can an employee use a health FSA to pay in advance for COBRA premiums?
The U.S. Department of Labor, Department of Defense and Department of Veterans Affairs launched a contest for companies to build a software application to match the skills of veterans with employer needs. $1M in total prizes are being offered.
The Affordable Care Act requires employers that are “applicable large employers” (ALEs) to offer health coverage to their full-time employees or pay a penalty. Employers that are not ALEs are not required, under federal law, to provide health benefits. This makes it important for an employer to know if it is an ALE.
Q.- Our plan year starts 1/1/2020 and we held open enrollment in November. Employees pay for coverage with pre-tax dollars. An employee has just asked if she can change her FSA election and her medical plan election because she just learned she will be needing surgery. Should we let her do this?
The beginning of the year is a good time for employers to take stock of state and federal HR responsibilities. This includes making sure notices are posted appropriately, if required.