Tax Provisions of the Affordable Care Act Effective 2012

Fees on Health Plans

The healthcare law tacks on a fee of $1 per year to private insurance plans.  The money will fund comparative effectiveness research which studies which treatments work best for particular conditions. (Effective Oct. 2012.)

On December 5, 2012 the IRS released final regulations providing guidance on the fees imposed on health insurance policies and plan sponsors of self-insured plans.  The fee will be $1 for policy years ending before October 1, 2013 and $2 thereafter, multiplied by the average number of lives covered under the policy.  The fees will fund the Patient-Centered Outcomes Research Institute which will analyze if the cost of certain medical treatments is justified in relation to the value they provide.

The regulations are effective December 6, 2012 and fees will apply to policy and plan years ending on or after October 1, 2012, and before October 1, 2019.

Charitable Hospitals

There are new requirements applicable to Sec. 501(c)(3) hospitals, regarding conducting a community health needs assessment, adopting a written financial-assistance policy, limitations on charges, and collection activities. (Effective March 2010; community health needs assessment effective March 2012.)

Information Reporting on Health Insurance Coverage

Employers must report, on an employee’s W-2, the cost of health insurance coverage under an employer-sponsored group health plan. 

In order to provide taxpayers more time to adjust their payroll systems in order to accommodate this new reporting requirement, the IRS issued Notice 2010-69, making the reporting optional for 2011W-2s issued in 2012. 

The IRS granted small employers further relief through Notice 2011-28 which makes the reporting requirement optional for 2012 W-2s issued in 2013.

For more information on information reporting on health insurance coverage, go to Notice 2012-9 or the IRS website.