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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: For the next few weeks, Spencer’s Benefits Reports will highlight specific provisions in the new health reform law that affect employer-sponsored plans.
Sec. 1001(5) of the Affordable Care Act and Sec. 1004(d)(1) of the Health Care and Education Reconciliation Act concerns dependent coverage.
A group health plan and a health insurance issuer offering group or individual health insurance that provides dependent coverage of children must continue to make health coverage available for an adult child until the child turns 26 years old, regardless of whether or not the dependent is a full-time student, disabled, or married.. Health plans or health insurers are not, however, required to cover a child of the adult child receiving dependent coverage.
Additional Tax Change For Dependent Coverage
Although the Affordable Care Act requires that group health plans and health issuers that cover dependent children do so “until the child turns 26 years of age,” this provision does not affect the income tax exclusion for employer-provided health benefits under the Internal Revenue Code.
In a separate change made by the Health Care Reconciliation Act of 2010 (Sec. 1004(d)(1)), the tax exclusion for employer-provided health benefits has been extended to include any adult child “who as of the end of the taxable year has not attained age 27,” regardless of whether or not the dependent is a full-time student, disabled, or married.
Note that the basic definition of a “dependent” in IRC Sec. 152 has not been changed. Under these rules, a child is a dependent for whom a dependency exemption may be claimed only if he or she is a qualifying child (IRC Sec. 152(c)) or a qualifying relative (IRC Sec. 152(d)). For health care purposes however, the two health reform provisions govern.
Thus, employers now need to pay attention to three separate provisions when designing plans to cover dependents:
New Standard Set
The young adult age group tends to have a greater proportion of uninsured than do other age groups because young adults often are employed in low-wage jobs that either do not provide health insurance or provide health insurance that the young workers cannot afford. These two new provisions set a nationwide standard to require employers to cover adult children younger than age 26, and to provide a tax exclusion for this coverage until age 27, regardless of whether or not the dependent is a full-time student, disabled, or married.
Effective date. The provision requiring dependent coverage until age 26 is effective for plan years beginning on or after Sept. 23, 2010 (six months after the date of enactment). The provision allowing a tax exclusion until age 27 is effective on March 23, 2010 (the date of enactment).
CCH Law, Explanation And Analysis Of Health Reform Act Available
CCH's Law, Explanation And Analysis of the Patient Protection and Affordable Care Act provides the most comprehensive and practical guidance available to professionals needing to make sense of this historic legislation. A hard-copy version of the book is available for $149.
Spencer’s Benefits Reports subscribers have access to the Law, Explanation And Analysis with their Internet susbcription:
(1) To access the legislation on IntelliConnect, visit “News” under the browse tree menu “Health Care Compliance and Reimbursement.”
(2) To access the legislation on the Internet Research Network, click on “Patient Protection and Affordable Care Act: Law, Explanation, and Analysis” on the “Health Care Reimbursement” tab, under the “Medicare and Medicaid Guide” blue bar.
For more information or to order the hard-copy version of the book, please call (800) 248-3248 or click http://hr.cch.com/Products/ProductID-7127.asp. Discounts are available for multiple copies.
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