The penalty for withdrawals from HSAs that are not used for qualified medical expenses will increase from 10% to 20%, and the penalty for unqualified withdrawals from Archer MSAs will increase from 15% to 20%.
An annual fee on manufacturers and importers of branded drugs will be imposed beginning in 2011.
Medical Loss Ratios:
The CLASS Act, a voluntary federal insurance program for employees to purchase long-term care becomes effective. Employers may elect to automatically enroll employees in the CLASS program, and employees may opt-out.
Over-the counter drugs will not be eligible for reimbursement from a flexible spending account (FSA), health savings account (HSA), health reimbursement account (HRA) or Archer medical savings accounts (MSAs) without a prescription.
Voluntary Long-Term Care:
Health plans in the individual and small group markets will be required to spend 80% of premium dollars on medical services, while plans in the large group market will be required to spend 85%.
Beginning in 2011, employers must report the value of employer-provided health coverage on an employees W-2. This requirement does not change the tax treatment of employer-provided health coverage or count as income for the employee.
UPDATE: The IRS has issued Notice 2010-69, which states that employers now have the option to report for 2011; it is no longer a requirement.
Qualified Medical Expenses:
Increased Penalty for Nonqualified Withdrawals:
Drug Importer Fee:
Health Care Reform: A Timeline for Employers