H&W: Health Care Reform Compliance Failures Must Now be Included on Updated IRS Form

Health Care Reform Compliance Failures Must Now be Included on Updated IRS Form: Since January 1, 2010, plan sponsors have been required to report any failure to comply with group health plan mandates, such COBRA; HIPAA portability, access, renewability; parity in mental health and substance use disorder benefits; 48-hour and 96-hour hospital stay requirements in connection with childbirth for mothers and newborns; and others.

The updated Form 8928 now requires employers to report any failure to comply with the mandates of health care reform, such as the removal of lifetime limits, the extension of health coverage to dependents under the age of 26, the prohibition on rescission, and the new appeals process.

Compliance failures result in an excise tax that varies based on the type of violation. The excise tax for COBRA violations and other group health plan failures is generally $100 per day per affected individual during the noncompliance period. Exceptions to the excise tax are provided for failures that are due to reasonable cause and not willful neglect.

The tax is generally imposed on the employer. The deadline for reporting and paying the tax is the deadline for filing the responsible party’s Federal income tax return without extension.

The updated form can be found on the IRS website at: www.irs.gov/pub/irs-pdf/i8928.pdf

Instructions for filling out the form can be at: www.irs.gov/pub/irs-pdf/i8928.pdf