Employee Benefits Compliance, Timeline

Health Care Reform Provisions Effective in 2013

The following provisions of the Affordable Care Act (ACA) are scheduled to become effective in 2013.  If  the Supreme Court decision in Health and Human Services v Florida (expected by this summer) changes or eliminates any of these provisions, Leavitt will publish a revised 2013 Chart of ACA Provisions.

Provision, Effective Date,  Who it Applies to
$2,500 Limit on Health FSA Annual Pre-Tax Contribution
Effective January 1, 2013
Effective January 1, 2013, employee pre-tax contributions to Health FSAs will be limited to $2,500 per calendar year. For subsequent years, this amount will be indexed to CPI. Additional guidance is needed to clarify how this will apply for non-calendar-year plans beginning in 2012.  E.g., Plan year 4/1/12 – 3/31/13.
Medicare Part D Retiree Subsidy 
Effective January 1, 2013
Employers who provide prescription drug coverage to Medicare-eligible retirees will no longer be able to take a tax deduction for the amount for which they receive a federal subsidy.
Fee on Medical Device Manufacturers and Importers
An excise tax will be imposed on manufacturers and importers of medical devices.  It is expected this fee will be passed on to medical plans and consumers.
Increase in Medical Expense Itemized Deduction Threshold
Effective January 1, 2013
For taxpayers who itemize deductions, the threshold for unreimbursed medical expenses will increase from 7.5% to 10% of AGI, except that for taxpayers age 65 and older the threshold remains at 7.5% through 2016.
Additional Medicare Payroll Tax on “High-Earners”
Effective January 1, 2013
An additional 0.9% Medicare tax will be imposed on wages and self-employment income over $200,000 ($250,000 for taxpayers who file “Married Filing Jointly”).
Medicare Tax on Investment Income of “High-Earners”
Effective January 1, 2013
A 3.8% tax on unearned income will be imposed on taxpayers with income over $200,000 ($250,000 for taxpayers who file “Married Filing Jointly”).
$500,000 Limit on Health Insurers’ Tax Deduction for Executive Compensation
Effective January 1, 2013
Beginning in 2013 and only with respect to services performed after 2009, health insurers cannot take a deduction of more than $500,000 for current and deferred compensation paid to each officer, director, employee, or services provider.
Employers to Provide Notice of Health Insurance Exchanges
Effective March 1, 2013
Applies to all employers
Beginning on March 1, 2013, employers must provide employees written notice:
(1) of the existence of the Health Insurance Exchange which will
     become operative as of January 1, 2014;
(2) of the employee’s potential eligibility for federal assistance if
     the employer’s health plan doesn’t meet affordability and
     minimum value criteria under PPACA and if employee
     household income is below certain thresholds; and
(3) that employees may lose the employer’s contribution to health
    coverage if they purchase health insurance through the Health
    Insurance Exchange.
Open Enrollment Begins for Insurance Exchange
Effective October 1, 2013
Applies to “qualified individuals” and small employers
Initial open enrollment period will be from October 1, 2013 through March 31, 2014, for the individual Health Insurance Exchanges.
Coverage will begin under Exchange health insurance policies as follows:
(1) January 1, 2014, for those whose applications are received by
     the Exchange on or before Dec. 22, 2013.
(2) For applications received between the first and the 22nd day of
     January or February, coverage will be effective as of the first
     day of the following month.
(3) For applications received between the 23rd day of the month
     and the last day of the month of December, January, or
     February, the Exchange may make coverage effective either
     the first day of the following month or the first day of the second
     following month.
For 2015 and subsequent years, the proposed annual open enrollment period for an Exchange is October 15 through December 7 of the preceding calendar year.