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Health and Welfare Provisions in the American Taxpayer Relief Act of 2012

On January 1, 2013, Congress passed the American Taxpayer Relief Act (the ?Ç£Act?Ç¥) to avert the so-called ?Ç£fiscal cliff?Ç¥ of automatic tax increases and spending cuts that became effective on that date. The Act contains several health and welfare related provisions, including the following: Transportation Expenses: The Act retroactively reinstates a higher pre-tax allowance for qualified employer-provided transit benefits for 2012 and extends it through December 31, 2013.?á The higher pre-tax allowance was part of the American Recovery and Reinvestment Act of 2009, which increased the monthly limit for employer-provided transit benefits to equal the limit for qualified parking benefits until the end of 2011. Permanent Extensions of EGTRRA Educational Assistance, Adoption Assistance and Dependent Care Tax Benefits: The Act permanently extends certain provisions that were subject to the sunset provision under the Economic Growth and Tax Relief Reconciliation Act of 2001 (?Ç£EGTRRA?Ç¥), including income exclusions for employer-provided educational and… Continue Reading

Employer Penalty Proposed Regulations Issued

The IRS issued proposed regulations under the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥) regarding the employer penalty that will be effective in 2014. Generally, the employer penalty may be assessed if (1) the employer has not offered ?Ç£affordable?Ç¥ coverage that provides ?Ç£minimum value?Ç¥ to full-time employees and dependents and (2) a full-time employee receives a government subsidy in connection with a health plan provided by an exchange established under PPACA.?á The proposed regulations contain a number of clarifications and new guidance.?á For example, hours of service for purposes of determining whether an employee averages 30 hours per week includes paid vacation and paid leaves of absence.?á Future rules may be issued regarding the treatment of short-term employees; however, there are no special rules for high-turnover positions.?á An employer may not render an employee ineligible for a government subsidy by enrolling the employee in mandatory coverage that does not provide… Continue Reading

January 2013
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