ExactCPA Commentary
Beginning on January 1, 2013, several provision of the Health Care Reform Act will go into place including:-Information Reporting on Health Insurance Coverage
-Allowable Contributions to Health Flexible Spending Arrangements
-Medical Care Itemized Deduction Threshold
-3.8% Medicare Tax on Net Investment Income
-0.9% Medicare Surtax
-Excise Tax on Medical Device Manufacturers
-Deductions for Federal Subsidies for Retiree Prescription Plans
Over the next week, we’ll look at each of these topics to see how this might affect you or your business. Please follow up with your tax adviser on how these topics might impact your specific situation.
Information Reporting on Health Insurance Coverage
Starting in 2013, certain large employers will be required to report the cost of health insurance to employees via their W-2. That means, when you get your W-2 this January, if you work for one of these large employers, you will see the cost as a line item on your W-2. Don’t worry; this is nothing that you have to worry about with filing your tax return. There is no hidden tax here. According to the IRS website, the theory behind employers being required to provide this information is so that employees can have “useful and comparable information on the cost of their health care coverage”.
While most large employers will be subject to the reporting requirements, certain employers and plans will be exempt based on the transition relief rules currently in place. For more information on the reporting rules for employer health plans, please see the IRS website for more details by following the link below:
http://www.irs.gov/uac/Employer-Provided-Health-Coverage-Informational-Reporting-Requirements:-Questions-and-Answers
You should also contact your tax adviser to discuss the effects of this and any other tax provision in detail. Come back tomorrow where we will discuss the rules related to the Allowable Contributions to Health Flexible Spending Arrangements.