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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:

W-2 Reporting:

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