The Department of Labor issued Part VI of Health Care Reform Frequently Asked Questions which addressed whether particular changes would cause a plan to relinquish grandfather status, including:

(1) examples of "bona fide employment-based reasons" that will not cause a plan to lose its grandfather status;

(2) changes in cost sharing when a generic alternative becomes available for a particular prescription drug that previously had no generic alternative - will not result in loss of grandfather status;

(3) specific example of the interaction of value-based insurance design (VBID) and the no cost-sharing preventive care services requirements - will not result in loss of grandfather status;

(4&5) if a plan amendment is adopted that will cause the plan to lose its grandfather status, the loss of status occurs on the date an amendment becomes effective, regardless of when it is adopted;

(6) a plan that bases the employer contribution amount on a formula will not lose grandfather status if the formula does not change, but the total cost of coverage increases and results in a more than 5 percent decrease in the employer's contribution rate (compared to what it was on March 23, 2010).

Click here to read the FAQs.

As you know, PPACA requires employers to report the cost of every employee's coverage under an employer-sponsored group health plan. Although slated to start in tax year 2011, this was made optional for all employers when IRS Notice 2010-69 was issued last fall.

Further delays and changes to this requirement last month have provided more relief for certain employers. The IRS issued Notice 2011-28 on March 29 which mandated optional reporting for small employers for the 2012 tax year, and therefore is not required until tax year 2013. Additionally, the notice provides guidance on what coverage and contributions should be included and excluded, examples of various methods of calculating the cost of coverage, and addresses calculation issues for reporting.

The highlights of the new guidance are as follows:

• Small employers are defined as employers that are required to file fewer than 250 W‐2s for 2011. Small employers will not be required to report the cost of employer‐provided health coverage on any forms required to be furnished to employees until January 2014 (for tax year 2013 Form W‐2).
• Larger employers are required to start reporting the cost of employer‐sponsored group health coverage on the 2012 Form W‐2, which employers must provide in January 2013.
• For all employers, aggregate cost is determined under rules similar to the rules for determining the "applicable premium" for purposes of COBRA continuation coverage.
• For all employers, the cost of coverage is determined on a monthly basis, and the annual cost is calculated by aggregating the monthly costs. This automatically takes into account changes in the cost of coverage or in the benefit option elected during the year.
• Employers are not required to issue W‐2s to report the cost of coverage provided to retirees or to other former employees who do not receive wages or salary in the current tax year and for whom the employer is not otherwise required to issue W‐2s.
• If future guidance is more restrictive, it will not be applicable earlier than Jan. 1 of the calendar year beginning at least six months after the date the future guidance is issued.

As always, the requirement is for informational purposes only and does not affect the taxability of the coverage. If you are not a "small employer," the delayed effective date does not apply, and you will need to begin reporting for the 2012 tax year.

Click here to read Notice 2011-28.

The 1099 provision would have required businesses to send a 1099 tax form and collect W-9 information from every vendor it purchases more than $600 worth of goods or services from each year.

Earlier this month, the Senate voted 87-to-12 to repeal the provision. The House passed the measure in March on a bipartisan 314-to-112 vote. Obama’s signing of the legislation into law marks the end of a nearly eight-month-long effort by lawmakers to do away with the 1099 tax-reporting provision.

The Senate voted Tuesday to repeal the 1099 tax reporting requirement imposed as a provision of PPACA for small businesses. The final vote was 87- 12 to repeal the widely unpopular requirement that businesses report all purchases of $600 or more to the IRS.

If enacted into law by President Obama, the measure would mark the first successful effort to repeal part of the national health care overhaul.