Posted on January 5, 2012

The interim guidance on reporting the cost of the employer-sponsored group health plan coverage to employees is required under the Patient Protection and Affordable Care Act of 2010. The IRS has responded to comments and released changes and new Q&As to the guidance in Notice 2012-9. Changes include:

  • A new example for Q&A-19 that demonstrates that the reporting requirement does not apply to coverage under a health flexible spending arrangement (FSA) if contributions occur only through employee salary reduction elections.
  • Modification to Q&A-20 to clarify that the standard for determining whether coverage under a dental plan or vision plan is subject to the reporting requirement is based upon the same standard for determining whether the coverage is subject to the rules set forth in the regulations under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
  • Modification and correction to Q&A-23 to clarify that the reporting requirement does not apply to the cost of coverage includible in income under § 105(h), or payments or reimbursements of health insurance premiums for a 2% shareholder-employee of an S corporation who is required to include the premium payments in gross income.
  • Clarification on how to calculate the reportable amount for coverage only a portion of which constitutes coverage under a group health plan (Q&A-34).

Click here for additional guidance in Notice 2012-9.