Information Reporting on Health Insurance Coverage
Small employers must report, on an employee’s 2013 W-2, issued in 2014, the cost of health insurance coverage under an employer-sponsored group health plan.
For further information, see IRS Notice 2011-28
Individual Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage
Beginning January 2014, individuals who do not maintain the proper minimum essential coverage (as defined in the regulations) each month, as mandated by the health care reform legislation, or qualify for an exemption will be subject to a tax to be paid on the individual's Federal income tax return. The penalty is not more than $95 for 2014, $325 in 2015, and $695 in 2016.
Proposed regulations [REG-148500-12]
were issued on January 30, 2013. The IRS also provided an FAQ
on the topic as well.
Health Insurance Premium-Assistance Tax credit
The act provides for refundable tax credits that eligible taxpayers can use to help cover the cost of health insurance premiums for individuals and families who purchase health insurance through a state health benefit exchange (which each state is required to establish under section 1311 of the act). Under new IRS § 36B, an eligible individual will enroll in a plan offered through an exchange and report his or her income to the exchange. Based on the information provided to the exchange and his or her income, the individual will receive a premium assistance credit. Treasury will pay the premium assistance credit amount directly to the insurance plan in which the individual is enrolled. The individual will then pay to the plan in which he or she is enrolled the dollar difference between the premium tax credit amount and the total premium charged for the plan.
Eligibility for the premium assistance credit is based on the individual’s income for the tax year ending two years prior to the enrollment period. The premium assistance credit is available for individuals (single or joint filers) with household incomes between 100% and 400% of the federal poverty level (for the family size involved) who do not received health insurance through an employer or a spouse’s employer. The credit amount is determined by the Secretary of Health and Human Services, based on the percentage of income the cost of premiums represents, rising from 2% of income for those at 100% of federal poverty level for the family size involved to 9.5% of income for those at 400% of federal poverty level for the family size involved.
The premium assistance credit will be available for years ending after Dec. 31, 2013.
On May 18, 2012 the IRS issued final regulations providing guidance on the credit. For more information, on the health insurance premium tax credit see the website: www.healthcare.gov.
Reporting Requirements for Insurers
Requires insurers (including employers who self-insure) that provide minimum essential coverage to any individual during a calendar year to report certain health insurance coverage information to both the covered individual and to the IRS.
A qualified health plan offered through a health insurance exchange is a qualified benefit under a cafeteria plan of a qualified employer.
Employer Shared Responsibility Payment - The "Play or Pay" Rules
Beginning in 2014, an applicable large employer (generally employers employing 50 or more full-time employees) that does not offer coverage for all its full-time employees, offers minimum essential coverage that is unaffordable, or offers minimum essential coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60%, will be required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.
For further information, please see IRS Notice 2012-17, an FAQ; Notice 2012-58, which discusses safe harbors that may be used to determine full-time employee status and used to determine if coverage is affordable; and Notice 2012-59, which provides information on waiting periods which apply before coverage begins.
On December 28, 2012, the IRS issued proposed regulations [REG-138006-12] as well as a list of questions and answers related to section 4980H. The proposed regulations provide employers a detailed roadmap for them to follow when implementing the new "play or pay" rules. They also provide various safe harbors and transitions rules to help ease the administrative burden of implementing the rules in 2014.
On March 14, 2013 the AICPA submitted comments on the proposed regulations in order to request clarification of various elements of the regulations.
Time for Payment of Corporate Estimated Taxes for 2014
There will be an increase of 15.75% in the amount of corporate estimated tax payments for corporations with assets of at least $1 billion for payments due in July, August, and September 2014. This provision was designed to help finance health care reform.