Upcoming Payroll Changes: Get Ready!

The Affordable Care Act included a number of changes to payroll reporting.

• On your 2011 W-2’s you will need to report the value of the employee’s health insurance. The amount reported does not affect tax liability. These are the W-2's that you will file in 2012 for the 2001 year. However you should take some steps now to get ready for next year. You need to contact your outside payroll company or your financial software company if you prepare payroll in-house, to make sure that the health insurance expense for each employee can be captured and included in next year’s W-2. Also check with your health insurer to make sure you will receive a yearend report that shows the health insurance expense for each employee.

• Starting January 1, 2011, the cost of over the counter drugs cannot be reimbursed from a Flexible Spending Arrangement unless a prescription is obtained.