In October, the IRS announced it will defer new W-2 reporting requirements, making that reporting OPTIONAL for 2011. The Treasury Department and IRS chose to give employers more time to change payroll systems to comply with the new requirement. In the future, W-2 forms should include the combined costs of an employee’s medical, dental and vision plans. These amounts are not taxable. They are for informational purposes only.

Other changes for 2011 include:

• Over-the-counter drugs like aspirin, cold medicine and cough suppressants are no longer eligible for reimbursement under Flexible Spending Accounts (FSA), Healthcare Reimbursement Accounts (HRA) and Health Care Spending Accounts (HSA) without a prescription.
• The penalty tax for withdrawing funds from an HSA for non-qualified expenses is increased from 10 percent to 20 percent, along with the applicable income tax.

The Starr Group has put together a Healthcare Reform Quick Reference Timeline so groups can easily track important deadlines under the Patient Protection and Affordable Care Act (PPACA). Contact The Starr Group to find out more about upcoming changes and to help your benefit plan

Draft W-2 form

Healthcare Reform Quick Reference