There are a number of Healthcare Reform requirements for plans with employer contributions to a health Flexible Spending Account (FSA) including:
- Employers must report the total cost of any group health coverage provided to employees if they prepared 250 or more W-2s for tax year 2018. The cost is not taxable. Employer contributions to health FSAs are required to be included in W-2 Box 12, Code DD.
- Employers must distribute a Summary of Benefits and Coverage (SBC) at open enrollment for most of their group health plans. If the plans include a health FSA as non-excepted benefits, the requirement to submit an additional SBC may be met by referring to the health FSA benefit in the SBC where applicable. There are some conditions that define a Health FSA as an excepted benefit including:
- You offer other group health coverage and
- You do not offer employer contributions greater than $500 to any employee that is not a dollar for dollar match.
If the conditions above are not met, your plan is considered a non-excepted Health FSA plan, which is subject to the SBC requirement.