Tip of the Day: Raise the roof (on HSA limits)

The Internal Revenue Service recently released a notice outlining 2010 minimums and maximums for health savings accounts plans and high-deductible health plans.

For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.

The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.

Related EBN coverage:
What's in it for me?
Offering answers to 'What's happening to my health plan?'

Tip of the Day: Got COBRA questions? The IRS offers answers

The Internal Revenue Service has published a notice that contains 58 questions and answers addressing the COBRA premium subsidy. Only 58? Well, I suppose it's a good place to start.

Tip of the Day: See the new IRS info on claiming the COBRA subsidy

Effective this week, employers no doubt want to claim credit for the federal COBRA subsidy provided in the economic stimulus law. Here's help to do just that.

New information at IRS.gov includes questions and answers for employers and a revised version of Form 941, the quarterly payroll tax return employers will use to claim credit for COBRA premiums. The new form will also be sent to about 2 million employers in mid-March.

Under the new American Recovery and Reinvestment Act, COBRA-eligible employees are responsible for 35% of the cost of COBRA coverage. Employers can receive a credit for the other 65% after submitting:

* Documentation they received the employee’s 35% share of the premium.
* A copy of an invoice from the insurance carrier showing proof of payment.
* Declaration of the former employee’s involuntary termination.

Tip of the Day

Check out the IRS' YouTube presentation on complying with the soon-to-be effective 403(b) regulations. You won't regret it; Jan. 1 will be here before you know it.

News You Can Use: Y? Because we're still calculating.

The IRS is waiving 2008 Code Y reporting for deferred compensation under 409A nonqualified deferred compensation plans, citing a need to figure out "how to calculate the amount that would be included in income." While they calculate, take a breather.

News You Can Use: 401(k) changes a’comin’

Could be good news, bad news on the 401(k) front, as the IRS announced it’s raised the annual contribution limit from $15,500 to $16,500, but congressional lawmakers want to take the bull in a china shop approach to governing the plans, seeking to eliminate tax breaks for investors and mandating participation.

News You Can Use: IRS Guidances

IRS Issues Guidance on Cafeteria Plan Distributions to Reservists Called to Duty
This past week the Internal Revenue Service ("IRS") issued guidance on implementing provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008 or "HEART," relating to health Flexible Spending Accounts (FSAs) in cafeteria plans. See IRS Notice 2008-82. The HEART legislation was passed overwhelmingly by the House and Senate in late May and signed into law by President Bush in June. This legislation provides tax relief to members of the armed forces, particularly reservists who are called to active duty and those who are killed in the line of duty. See the June 20, 2008, edition of CAB eNEWS for a complete discussion of the HEART Act.

Thanks to SMART for the heads up.

News You Can Use: IRS modifies 409A

The IRS recently issued a ruling to modify and amplify Revenue Procedure 2008-3, 2008-1 I.R.B. 110, regarding which rulings and determination letters will not be issued concerning tax consequences of arrangements in Section 409A.