Tuesday, January 24, 2012


The provision that required employers to report the cost of Medical, Dental and Vision coverage was supposed to go in effect for reporting year 2011.  However, that was delayed and the IRS has issued guidance for reporting these amounts (2012-9) for 2012 W-2's.

In a nutshell, the IRS stated that all employers who have issued more than 250 W-2's will be required to show the value of the employer sponsored medical, dental and vision coverage on their employees 2012 W-2's.  The cost of coverage does not include contributions made to a Health Savings Account (HSA), Medical Savings Account (MSA) or Health Reimbursement Arrangements.

In calculating the cost of coverage to be reported, the IRS indicated that this amount would be the same amount used to calculate the COBRA cost, not including the 2% administration fee, if any.

Those employers who file less that 250 W-2's are exempt from this provision at least through 2012.

The big question is why does the IRS want this information?  They state it's for informational purposes only.  Two thoughts:  This could be a way for the Fed to determine if their is coverage in place in regards to the "no coverage penalty" or a way for the Fed to tax those "Cadillac Plans" in 2018.

Tuesday, January 10, 2012


In December the Department of Health and Human Services outlined proposed policies defining what exactly are "Essential Health Benefits" to be included in health plans.  All insurance policies must cover these services in order to be certified and offered in the exchanges.  Below are a list of those services:

Ambulatory Patient Services
Emergency Services
Maternity and Newborn Care
Mental Health and Substance Abuse Disorders
Prescription Drugs
Rehabilitative and Habilitative Services
Lab Services
Preventive and Wellness Services, Including Chronic Disease Management
Pediatric Services, Including Oral and Vision Care

Each state would need to select a "Benchmark Plan" which could include at least all of the services above.  Could be from the largest plan in the state, largest state plan, largest federal plan, largest hmo plan offered in state.  This is the HHS's way of saying we are flexible.  If the state does not elect their own, the default benchmark plan will be the small group plan with the largest enrollment in the state. 

This "benchmark plan" is not to be confused with "Minimal Essential Coverage" which if you have more than 50 employees, could determine whether your health plan could set you up (or help you avoid) a big penalty from the fed. More to come later on that...........

So basically this means that all health plans would need to include an array of services in each of those ten areas identified in order to be offered through the state exchanges.