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New Health Care Laws — Top 10 Things Employers Need to Consider Before 2012

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On 23 March 2010 President Obama signed into the Patient Protection and Affordable Care Act, and one week later, on 30 March 2010, the President signed the Health Care and Education Affordability Reconciliation Act of 2010, which made numerous changes to H.R. 3590 (collectively called the "Acts").

These Acts combine to reform the landscape of health care, including market coverage, individual health mandates and various tax and disclosure provisions. Many different changes will occur over the next eight years, but the more immediate requirements that companies need to consider in the next two years could significantly impact costs and reporting. Taxand US identifies the top 10 things employers need to consider before 2012.

1. "Grandfathered" Plan Status
How will the Acts affect your company, what changes are acceptable to retain "grandfathered" status, and what changes will negate the status?

2. Retiree Medical Reinsurance
Why should companies that currently provide retiree medical coverage apply for reimbursements under the reinsurance fund now?

3. Health Care Coverage Mandates
What coverage mandates will apply to a company's health care plan regardless if it is "grandfathered" or not?

4. Material Modifications
What actions do employers need to take regarding material plan modifications?

5. Expanded Claims Appeals Process
How will the expanded claims appeals process affect employers?

6. Expanded Non-discrimination Requirements
How will this affect companies' current health care plans?

7. Qualified Expenses under HSAs, FSAs and HRAs
What medicines and other expenses are eligible for reimbursement under these accounts?

8. Form W-2 Reporting for Benefits

What will companies need to do to report the "aggregate" cost of employer-sponsored health insurance coverage on each employee's Form W-2?

9. Form 1099 Reporting
What does this mean for companies of all sizes?

10. Limitation of Compensation Deduction for Health Insurance Providers
How will this affect companies that receive revenues from providing health insurance?

Taxand's Take


Many other requirements outlined in the Acts will be effective after January 2012 through December 2018. If the composition of the US Congress changes after the next election, it will be interesting to see if other laws are passed that will either repeal or amend the future requirements outlined in the Acts, or if the Acts will remain as enacted in 2010. We believe there are limited possibilities to change the laws and requirements that will go into effect this year through 2012. Companies should prepare for these imminent changes to health care and related tax and reporting provisions through the suggestions made in this article.

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Your Taxand contact for further queries is
Lisa Schlepp
T. +1 214-438-1033
E. lschlepp@alvarezandmarsal.com

Taxand's Take Author