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1099 and W-2 Rules Finalized. For now.

In our roles as health insurance brokers, we spend the majority of our time assisting clients with HR functions. The HR consulting and support we provide has increased dramatically since the passing of PPACA. There are many employer responsibilities contained in the PPACA legislation, and as a result, many brokers are working with clients to ensure that their responsibilities are met. Two areas that have caused concern and confusion for employers over the past year include, the 1099 reporting requirements and the w-2 reporting rules. It's important that we as brokers understand these rules and guide clients appropriately. Updates to both the 1099 and w-2 regulations were recently enacted. Further details are included below. Past experience shows that these rules can change, and if this happens, employers will be counting on us to provide guidance. Continue to stay in touch with BAHU, MAHU and NAHU for the latest updates.

 

W-2 Reporting is Voluntary for All Employers for 2011 and Small Employers for 2012

IR-2011-31, March 29, 2011

WASHINGTON - The Internal Revenue Service today issued interim guidance to employers on informational reporting on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees. The IRS is also requesting comments on this interim guidance. The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable; employer-provided health coverage continues to be excludable from an employee's income, and is not taxable.

The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. Notice 2010-69, issued last fall, made this requirement optional for all employers for the 2011 Forms W-2 (generally furnished to employees in January 2012). In today's guidance, the IRS provided further relief for smaller employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least for 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and continuing this optional treatment for smaller employers until further guidance is issued.

Using a question-and-answer format, Notice 2011-28 also provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.

The 2011 Form W-2, prior IRS Notice 2010-69 deferring the reporting requirement for 2011, and Notice 2011-28 containing the new guidance are available on IRS.gov.

 

 

1099 Reporting Requirement Repealed

The White House
Office of the Press Secretary
For Immediate Release April 14, 2011
Statement by the Press Secretary on H.R. 4

On Thursday, April 14, 2011, the President signed into law:

H.R. 4, the "Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011," which repeals the expansion in the Affordable Care Act of requirements for businesses to report information to the Internal Revenue Service on payments for goods of $600 or more annually to other businesses and increases the amount of overpayment subject to repayment of premium assistance tax credits for health insurance coverage purchases through the Exchanges established under the Affordable Care Act.

 

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