Qualified transportation fringe benefit plans allow employers to provide employees with qualified parking, transit passes, vanpooling and bicycle commuter benefits on a tax-free basis.  

All benefits provided to an employee by his or her employer result in taxable income to the employee unless the Internal Revenue Code (Code) specifically excludes the benefit from taxation.  Under Code §132, employers are permitted to give the following transportation fringe benefits to employees on a tax-free basis: 

qualified parking; transit passes; vanpooling; and qualified bicycle commuting reimbursement. 

Qualified parking is parking provided to an employee near the business of the employer or at a location from which the employee commutes to work.  Parking is “provided to an employee” if the employer pays for or provides the parking on premises that it owns or leases.  The statutory limit for parking expenses is $240 per month for 2012, subject to cost-of-living adjustments...

On April 27, 2012, the IRS announced the 2013 inflation adjusted annual contribution limits for Health Savings Accounts (HSA) and the deductible amounts and out-of-pocket limits for the high deductible health plans (HDHP) to which HSAs are linked. 

A quick refresher.  An HSA is a portable, tax favored medical reimbursement account (at a bank or other financial institution) funded by the employee and/or employer, but owned and controlled by the employee.  HSAs are governed by Internal Revenue Code § 223.  

To be eligible to contribute to an HSA, the individual must not be another individual’s tax dependent, must not be enrolled in Medicare, must have current coverage under a HDHP, and must not be covered by any other health plan that provides coverage for a benefit prior to satisfying the regulatory minimum annual HDHP deductible unless it is permitted coverage.  Permitted coverage includes coverage provided for preventative care, dental or vision services (whether through an insurance plan...

This month the IRS released proposed regulations implementing health care reform’s requirement that issuers of certain health insurance policies and plan sponsors of certain self-insured group health plans pay excise taxes (i.e., a Patient-Centered Outcomes Research (PCOR) fee, sometimes referred to as the Comparative Effectiveness Research (CER) fee) to fund the Patient-Centered Outcomes Research Institute. 

Background

Health care reform contains numerous provisions that promote research to evaluate and compare health outcomes and the clinical effectiveness, risks, and benefits of medical treatments, services, procedures, drugs, and other strategies or items that treat, manage, diagnose, or prevent illness or injury.  One of these provisions establishes a private, nonprofit corporation, the Patient-Centered Outcomes Research Institute that will conduct such research.  The Institute will focus on advancing the quality and relevance of evidence-based medicine via comparative clinical effectiveness...

Final HIPAA/HITECH rules are in sight!  Last month, the rules reached the White House Office of Management and Budget (OMB), the final stop in the federal internal review process. 

The rules will modify HIPAA Privacy, Security, Enforcement, and Breach Notification Rules as necessary to implement the privacy, security, enforcement, and breach notification provisions of the Health Information Technology for Economic and Clinical Health Act (HITECH), and will modify the HIPAA Privacy Rule as required by the Genetic Information Nondiscrimination Act of 2008 (GINA). 

Generally, HITECH requires that covered entities under HIPAA notify affected individuals of a breach of unsecured protected health information, as well as the Secretary of the Department of Health and Human Services (HHS) and the media if a breach affects more than 500 individuals.  If a breach affects fewer than 500 individuals, the breach must be reported to HHS on an annual basis.  Additionally, HITECH mandates that business associates of covered entities report breaches directly to the covered entity.  HITECH also strengthens civil and criminal enforcement of HIPAA rules in a number of ways, e.g., by establishing tiered ranges of increasing minimum penalty amounts and by not allowing covered entities to escape penalties by claiming that the violation was unknown unless the covered entity corrects the violation within 30 days of discovery.   ...

Guest Contributor: Peter Antonie

An election for a cafeteria plan benefit can be corrected during the plan year in the context of a mistake if an employer can verify and confirm that a mistake was made in the election, either by the employer or employee.



Treasury Regulation 1.125-2 provides that a cafeteria plan election must be made in advance of the plan year, or eligibility date, and is irrevocable during the plan year. Treasury Regulation 1.125-4 provides 14 Permitted Election Change events for which an irrevocable election can be changed mid-year so long as the requested change is on account of the event and consistent with that event. Making a mistake in the election made is not a recognized Permitted Election Change event. However, IRS officials have offered guidance that, where there is clear and convincing evidence that an individual has made a mistake in an election or that the employer has made an administrative mistake in recording that election, the election can be undone,...

April is National Autism Awareness Month.  Autism is a complex developmental disability that typically appears during the first three years of life and affects a person’s communication and social interaction abilities.  The disorder occurs on a spectrum, in that it affects individuals differently and to varying degrees.  The prevalence of autism has risen to 1 in every 110 births in the United States and almost 1 in 70 boys. 

Did you know that health care reform contains important provisions for individuals with autism? The law prohibits insurers from denying coverage for children with autism or other pre-existing conditions and prohibits lifetime dollar limits on coverage.  Additionally, new plans must cover autism screening at no cost to parents and young adults without employer-provided insurance may stay on their parents’ insurance until they turn 26.  Starting in 2014, individuals with autism will have expanded access to affordable insurance options under the insurance exchanges and Medicaid. ...

The IRS has provided a helpful list of tax provisions stemming from the Affordable Care Act – or health care reform – that are now in effect.  The IRS will update this page as more provisions go into effect over the coming years. 

http://www.irs.gov/newsroom/article/0,,id=220809,00.html

Today marks the 3rd day of oral arguments before the Supreme Court in the health care reform case – and what a week it’s been!

On Monday, the Court heard arguments on whether the Anti-Injunction Act prevents the Court from considering the individual mandate provision until its actual effective date in 2014.    The 145-year-old Act prevents federal courts from deciding cases in which taxpayers are trying to prevent the government from collecting taxes.  The tax has to be actually due, and then the courts can hear the case. 

Eight of the justices fired questions at the attorneys during the oral argument (Justice Thomas continued his six year trend of silence during oral arguments).   Although it's impossible to predict the outcome based on questions, the line of questioning appears to indicate that the Court is leaning towards ruling that the Anti-Injunction Act will not apply – which means they can decide the larger issue of whether the individual mandate is constitutional now.   

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On Wednesday, March 14^th the Senate passed a bill (S. 1813) that authorizes Federal-aid highway and highway safety construction programs, and for other purposes, including a provision that restores parity for exclusion from income for employer-provided mass transit and parking benefits.   

Last year, Congress failed to extend parity between the two benefits and the mass transit benefit reverted from $230 to $125.  This bill increases the monthly amount that individuals may elect pre-tax for mass transit from $125 to $240, to match the parking benefit that began in 2012. 

Currently, the bill awaits consideration in the House of Representatives.  

The Departments of Labor, Health and Human Services, and Treasury have issued a set of 24 FAQs on the summary of benefits and coverage (SBC) requirement under health care reform.  The FAQs attempt to answer some of the questions raised to date.

Agencies have been fond of releasing guidance in the form of FAQs lately, probably in response to the volume of legislation churning out of health care reform.  FAQs provide a timely means for agencies to provide information to the public.  It’s unclear the weight that a court would give an FAQ, but in this rapidly changing regulatory landscape they are a welcome source of additional guidance. 

The Departments’ basic approach to health care reform implementation is to assist plans and insurers into coming into compliance with the new requirements.  Notably, the FAQs do not provide for an extension of the effective date of open enrollment periods on or after September 23, 2012 for participants and beneficiaries and plan years beginning on or after...