Tax Aspects of the Healthcare Act (Page 4)

Reporting Requirements
The Act requires insurers (including employers who self-insure) that provide minimum essential coverage to any individual during a calendar year to report certain health insurance coverage information to both the covered individual and to the IRS.The information required to be reported includes: 1) the name, address ,and taxpayer identification number of the primary insured, and the name and taxpayer identification number of each other individual obtaining coverage under the policy; 2) the dates during which the individual was covered under the policy during the calendar year; 3) whether the coverage is a qualified health plan offered through an exchange; 4) the amount of any premium tax credit or cost-sharing reduction received by the individual with respect to such coverage; and 5) such other information as the Secretary may require.

This reporting requirement takes effect for calendar years beginning after 2013.

Employer Information Reporting - The Act requires employers to disclose on each employee’s annual Form W-2 the value of the employee’s health insurance coverage sponsored by the employer. This reporting requirement is effective for taxable years after December 31, 2010.

Return Information Disclosure - The Act allows the IRS, upon written request from the Secretary of Health and Human Services, to disclose certain taxpayer return information if the taxpayer’s income is relevant in determining the amount of the tax credit or cost-sharing reduction, or eligibility for participation in the specified state health subsidy programs.

The Act allows the IRS, upon written request from the Commissioner of Social Security, to disclose certain limited return information of a taxpayer whose Medicare Part D premium subsidy, according to the records of the Secretary, may be subject to adjustment.

Conclusion
While the foregoing is not an exhaustive list of all of the tax implications of the Act (there are certain other modifications to deduction limits and thresholds along with other fines and fees which will be imposed on insurers), it does cover a majority of the provisions that will directly affect us, as tax professionals, and our clients. Should you have any questions regarding the information provided above or would like information on a provision that is not discussed above, please feel free to contact us.

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