Health Reform and the full impact of the Affordable Care Act continue to remind us that we can never be too prepared. Effective January 1, 2013 employers will have to start complying with the following requirements:
. Health FSA deferral limits. Some employers still are fuzzy on the specifics of the new flexible spending account rule. Annual contributions to health flexible spending account will be limited to $2,500 effective January 1. If your group has a flexible spending account option, it’s time to start giving educational materials to your employees detailing this new limit and another requirement that comes along with this rule. Over-the-counter drugs can still be run through an FSA, but the plan participant will need a doctor’s prescription to get the lower co pay from your pharmacy benefit manager or health insurance organization.
. Administrative simplification rules. Group health plans must comply with “administrative simplification rules for electronic exchange information and electronic fund transfers.” This provision contains the requirement that the plan sponsor also file a certification with the federal government verifying that the health plans are fully compliant with this rule. Penalties for failing to comply with the administrative simplification rules for electronic exchange information, electronic fund transfers and the reporting requirement of plan compliance carry fines. Those penalties for non-compliance are:
The fine is $1 per covered life, per day, up to a maximum of $20 per covered life, per year. A double penalty applies if the employers misrepresent any facts. The compliance and penalties apply to grandfathered plans. The system for brining this requirement to life must be ready to go on Jan. 1, 2013.
Employers must certify their compliance with these rules and notify the DOL beginning on Dec. 31, 2013.
. Rise in the Medicare payroll tax. The Medicare tax rate for employees’ payroll will rise 0.9% for wages and earning over $200,000 – $250,000 for married couples filing jointly. In addition, high-income households will be subject to a new 3.8% Medicare tax on investment income starting 2013. Employers must collect the employees’ share of the tax and remit to the Internal Revenue Service. This additional tax law does not, however, increase the employer’s share of the payroll tax, effective for tax years beginning Jan. 1, 2013.
Employee notification of state insurance exchanges. Plan sponsors must notify their employees of the forthcoming stat insurance exchanges, which are slated to go into effect in 2014. Employers need to inform employees with a forthcoming DOL model notice effective March 1, 2013, or such later date set forth in future DOL guidance.