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Post Date:  12/31/2014
Last Updated:  12/31/2014

Summary
Cross References
- Form 8965, Health Coverage Exemptions
- Form 8962, Premium Tax Credit (PTC)
- Form 1095-A, Health Insurance Marketplace Statement

The Health Care Reform Act was signed into law in March 2010, with tax provisions phasing in over a 6-year period.

Effective for 2010:
- The Small Employer Health Insurance Credit (Form 8941) provides employers with 25 or fewer full-time equivalent employees a tax credit if the employer provides nonelective contributions for the purchase of health insurance for its employees.
- Adult children coverage requires employers providing group health plans that offer dependent coverage to provide health benefits for any child of an employee who has not yet attained age 27 as of the end of the tax year.
- The Indoor Tanning Tax is a 10% excise tax on all indoor tanning services.

Effective for 2011:
- Employers with 100 or fewer employees can offer Simple Cafeteria Plans that avoid the nondiscrimination requirements for cafeteria plans, provided certain minimum eligibility and participation requirements and minimum contribution requirements are met.
- FSAs, HSAs, HRAs, and Archer MSAs can no longer reimburse tax free the cost of overthe- counter drugs unless the drug is prescribed by a doctor (or is insulin).

Effective for 2012:
- Health insurance companies are required to spend 80% or more of premium dollars on health care and not on profits or overhead (85% or more in the large group market). If the insurance company does not meet these percentages, a portion of the premium must be refunded to the customer. The rebates may be taxable or tax-free to the recipient, depending on whether the taxpayer received a tax benefit on the cost of the premiums.
- For plan years beginning on or after October 1, 2012, health reimbursement arrangements (HRAs) are subject to a $1 per participant Patient-Centered Outcomes Research Trust Fund fee ($2 for plan years ending before October 1, 2014, and $2.08 for plan years ending before October 1, 2015). The fee is paid by filing Form 720, Quarterly Federal Excise Tax Return.
- Employers with 250 or more employees are required to report both the employer and employee’s cost of employer sponsored group health plan coverage on the employee’s W-2.

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