On January 3, 2012, the Internal Revenue Service (IRS) released Notice 2012-09, which gave additional guidance on reporting the cost of employer-provided health care coverage on the 2012 Form W-2. The Notice, as described by the IRS, restates and clarifies the guidance provided in Notice 2011-28, including the information on how to report, what coverage to include, and how to determine the cost of the coverage.
- Dental and vision coverage are not included in the calculation if they are free-standing plans.
- EAP coverage, wellness programs and on-site clinics are not included unless a premium for that coverage is being charged to COBRA participants.
- Base the reportable premium on the active rates, not the COBRA rates.
More information will become available as legal experts weigh in. Until then, the guidance can be viewed here.
Proposed Guidance on Essential Benefits
On December 16, 2011, the Department of Health and Human Services (HHS) issued an informational bulletin that included proposed guidance on how states and health plans should comply with the "essential health benefits" provision of the Patient Protection and Affordable Care Act (PPACA).
As it turns out, the guidance offered little assistance to insurers and group health plans in determining exactly what to include as an essential benefit. Instead, the bulletin proposed to allow states four options to choose from when selecting a "benchmark" plan. The benefits of that plan would form the basis of the essential health benefits package in that state.
The four options are:
- Any of the three largest small-group plans in the state;
- Any of the three largest state employee health plans;
- Any of the three largest employee health benefits program (FEHBP) options; or
- The largest insured commercial non-Medicaid HMO plan operating in the state.
If the plan that a state selects as its benchmark plan does not include all of the 10 required categories of benefits, then the plan must be modified to include the missing categories.
Read more from the informational bulletin.
Essential Health Benefits Bulletin