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IRS has delayed reporting requirement for health care cost!

Comments

  • Good news, but not necessarily unexpected. IMHO. Congress loves to pass this kind of stuff (when either party is in power, not trying to be partisan here) and then the IRS goes nutso trying to formulate the details. This has happened before. Why I don't get too crazy trying to figure out the details of what's going to happen two or three years down the road. Usually, it changes 42 times during that period. :twisted: :roll:

    Remember when Congress passed a similar law that also included the type of coverage the employee had, back in, I think it was the late 80's, and there was supposed to be some "database" where all this information would be stored? IRS kept delaying and delaying because Congress never appropriate FUNDS to create and maintain said database, and the reporting requirement was eventually repealed.
  • Remember when Congress passed a similar law that also included the type of coverage the employee had, back in, I think it was the late 80's, and there was supposed to be some "database" where all this information would be stored? IRS kept delaying and delaying because Congress never appropriate FUNDS to create and maintain said database, and the reporting requirement was eventually repealed.

    Yes - that is the sort of thing Congress does to make itself look good - then makes sure it never actually happens by failing to fund it. Or funding it with poison pills.

    I expect there will be lots of changes after the election. It would be nice to have someone other than lame ducks passing legislation. The latest I heard was Senator Mary Landrieu went from holding up the appointment to Federal Budget Director "until the moratorium on deep water drilling is lifted" to "until we decide the de facto moratorium on deep water drilling is lifted".

    Sounds like whining on the playground with a twist --
    "If you won't play by my rules, which I make up as the game goes along, I will take YOUR ball and go home."
  • I'm standing up and doing a happy dance! Can you see me?

    Now if we can just get them to take the information totally off Form W-2 and put it ... :twisted:
  • PayLady wrote:
    I'm standing up and doing a happy dance! Can you see me?

    Now if we can just get them to take the information totally off Form W-2 and put it ... :twisted:

    Would that be somewhere the solar orb does not radiate? :twisted:
  • David,
    I agree that from an implementation standpoint that it would make more sense to get it directly from the insurance companies. However, I can see some value in employees actually seeing how many thousands of dollars it costs companies to insure them and their families each year. Of course some companies accomplish this with yearly benefit statements, but that's probably only a minority of them.
  • Now I am wondering - The amount to be reported is the "applicable" premium determined the same way as for COBRA - not the "actual" premium -
    Section 6051(a)(14) further provides that, for this purpose, the aggregate cost is to be determined under rules similar to the rules of § 4980B(f)(4), referring to the definition of the “applicable premium” under the rules providing for COBRA continuation coverage.
    http://www.irs.gov/pub/irs-drop/n-2010-69.pdf
    IRC 4980B(f)(4)(A)The term “applicable premium” means, with respect to any period of continuation coverage of qualified beneficiaries, the cost to the plan for such period of the coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred (without regard to whether such cost is paid by the employer or employee).

    Is the insurer actually in a better position to determine this than the employer? How are you getting the numbers for COBRA?
  • The reporting of this is easy enough, but the one requirement I fear is when we start having to differentiate on the Medicare taxes, which I believe occurs in 2013. Ouch!

    Our company has already prepared itself for the 2011 reporting requirement, so there's no going back for us. I'm a little suspicious about why exactly they (the government) want us to report it. My fear is that they will start taxing us on the value of it.

    :cry:
  • There are several reasons one is to establish the employee has insurance for the requirement that everyone have coverage. Another is to establish the amount paid by the employer per employee for tax credit purposes, another is to identify "Cadillac" policies for 2018.

    And as far as putting it on the W-2 is to eventually tax it, why would that be a necessary step - all that would have to happen there is for Congress to change the law so that employer paid health coverage is no longer excluded from gross wages and at that point it gets included in boxes 1, 3, & 5 (and possibly box 12 like excess group term life to notify the employee of imputed income). A special box on the W-2 is not required to do that. I think that idea came from people who heard the number would be on the W-2, thought that meant it would be taxed, and when told it would not be tax, decided that this was some sort of stealth plan to eventually tax it. Well, maybe partially true - we will see if the Cadillac plan provisions actually survive until 2018 - my prediction is that the entire system will evolve sufficiently by then that the provision will not be an issue.

    The information will affect the employer's and employee's tax situations, but that does not mean the benefit will be taxable - in the employee's case, the lack of a benefit might trigger tax for not having health insurance. In other words, the amount in that box is the employee's proof that the employee is not subject to the tax or penalty for not having coverage. My understanding is that amount will be an additional tax (like SE tax) computed and collected on Form 1040.