It has been more than a year since the Patient Protection and Affordable Care Act (PPACA) was implemented. Federal agencies are still providing guidance to companies on several of its provisions—including the grandfathered health plan rules and the requirement to report the cost of employer-provided health coverage on employee W-2 forms.
Grandfathered Health Plans
The Departments of Labor, Health and Human Services and Treasury recently released another set of frequently asked questions regarding the grandfathered health plan rules. This type of health plan is a group health plan or individual health insurance coverage in which at least one person was enrolled on March 23, 2010. These types of health plans are not required to comply with the non-discrimination testing requirements that are applicable to fully insured plans or the new appeals process. Under the plan, employees who transfer from one grandfathered health plan (a transferor plan) to another (a transferee plan) can cause the transferee plan to relinquish grandfathered status. This only applies if there is no bona fide employment-based reason to transfer the employee. The FAQ’s give a list of circumstances the government will consider a bona fide employment-based reason to transfer employees between plans.
Under PPACA, employers must report the cost of employer-sponsored health coverage given to employees. In late 2010, the IRS made this reporting voluntary for W-2 forms issued for 2011. This was in an effort to give companies more time to update their payroll systems so they can comply with the new reporting requirement. Employers are not required to begin reporting the cost of employer-sponsored health coverage until W-2 forms are issued for 2012. The reason for this reporting is for informational purposes.
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on the PPACA. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.
Currently rated by 0 people