The IRS has issued question-and-answer guidance on the recent changes to the Code by the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act). This Act’s changes enhance 401(k) and other benefits for military personnel in qualified military service.

The guidance consists of 20 questions and answers. Some of the areas the Q&As cover are:

• Survivor and Disability Retirement Benefits With Respect to Military Service
• Differential Wage Payments
• In-Service Distributions

Those with plans covering employees on active military duty should review these Q&As very carefully because they make clear some areas that have been gray before.  

Click here for a copy of Notice 2010-15: Miscellaneous HEART Act Changes

Fleet-Average Rule: The fleet-average rule governs employers operating a fleet of 20 or more qualifying vehicles (depending on the average lease value). The IRS has set up the maximum vehicle values to be used in calendar year 2010. The maximum values for which the fleet-average rule may be used are $20,300 for passenger automobiles and $21,000 for trucks or vans (up from $19,900 for both in 2009).

Cents-Per-Mile: The cents-per-mile rule determines the value of an employee's personal use by multiplying the standard mileage rate (50 cents per mile for 2010) by the number of miles driven for personal purposes. The maximum values for the cents-per-mile rule are $15,300 for passenger automobiles and $16,000 for trucks or vans (up from $15,000 and $15,200, respectively, in 2009).

Click here to view Rev. Proc 2010-10, 2010-3 I.R.B. 300 (Jan 14, 2010)

The IRS has released Forms 5498-SA and 1099-SA for the 2010 tax year along with their instructions. Form 5498 must be filed by the trustees and custodians of HSAs, Archer MSAs, and Medicare Advantage MSAs to report contributions to (and the fair market value of) these accounts. They also must file Form 1099-SA to report distributions. These forms are not to be used until 2011 when the 2010 tax year is due.

Click here to view a copy of 5498-SA (2010) (HSA, Archer MSA, or Medicare Advantage MSA Information).

Click here to view a copy of 1099-SA (Distributions from an HSA, Archer MSA, or Medicare Advantage MSA) (2010).

Click here to view the instructions for both forms.

The Department of Labor's Employee Benefits Security Administration has posted an updated Application for Expedited Review of Denial of COBRA Premium Reduction on their Web site for the 2010 DoDAA. The application is for individuals who want to request that the DOL review a denial of a COBRA premium subsidy. The DOL is required to make a determination within 15 business days after receipt of application for review. The site includes a quick check on eligibility for the COBRA premium reduction before directing individuals to the application that can be printed or completed online.

Click here to access the application.

The Department of Labor's Employee Benefits Security Administration has posted a notice of publication of an Employer's model notice regarding eligibility for premium assistance under Medicaid or the Children's Health Insurance Program (CHIP). The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) includes a requirement that the Departments of Labor and Health and Human Services develop a model notice for Employers to use to inform Employees of potential opportunities currently available in the Employee's state of residence for group health plan premium assistance under Medicaid and the CHIP.

Click here to view the Federal Register notice.

Click here to view the model notice.

The Department of Labor's Employee Benefits Security Administration posted a document containing the interim final rules with request for comments for implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. This Act requires parity between mental health or substance use disorder benefits and medical/surgical benefits with respect to financial requirements and treatment limitations under group health plans and health insurance coverage offered in connection with a group health plan. The regulation is effective on April 5, 2010, and applicable to plan years beginning on or after July 1, 2010.

Click here view the Federal Register.

Click here to view the fact sheet.