An employer is not required to use the same method for every plan but must use the same method with respect to a plan for every employee receiving coverage under that plan. The following methods are allowed to be used to calculate the cost of coverage: Premium charged method, COBRA applicable premium method (but does not include the 2% administrative fee), or Modified COBRA premium method.
For more information, refer to Module 11, Lesson 5
When reporting the cost of employer-provided health coverage on Form W-2, all the following methods can be used for calculating the amount EXCEPT:
COBRA applicable premium method.
premium charged method.
modified COBRA premium method.
actual COBRA premium charged method. – Correct Answer
Employers that fail to comply with the COBRA continuation coverage requirements could be subject to a tax of $100 per day of noncompliance for each qualified beneficiary (maximum of $200 per day per family affected by the same qualifying event). The tax will not be imposed if the failure to comply is due to reasonable cause and is corrected within 30 days.
For more information, refer to Module 11, Lesson 3
An employer who fails to comply with the COBRA continuation coverage requirements for one qualified beneficiary may be subject to a noncompliance penalty per day in the amount of:
- $100.00 for each beneficiary. . – Correct Answer
- $125.00 for each employee.
- $200.00 for each employee.
- $500.00 for each beneficiary.
The IRS ACA Information Return (AIR) system is used to electronically transmit Forms 1094-C and 1095-C. Employers with 250 or more forms are required to file electronically. Employers with less than 250 forms may voluntarily file electronically. Business Services Online (BSO) is the Social Security Administration’s electronic system for filing Forms W-2 and W-2c. The IRS’ Electronic Federal Tax Payment System (EFTPS) is used for paying federal taxes electronically. IRS’ Filing Information Returns Electronically (FIRE) system is used to electronically file information returns such as Forms 1042-S, 1099-MISC, and W-2G.
For more information, refer to Module 11, Lesson 4
Electronic filing of Forms 1094-C and 1095-C is done through which system?
- AIR– Correct Answer
- BSO
- EFTPS
- FIRE
Under IRS rules, employer contributions to a health plan are not taxable. Cash payments, such as severance payments, prizes in a sales contest, and third-party sick pay relative to an employer’s contribution are taxable.
For more information, refer to Module 4, Lesson 1
All of the following benefits are taxable fringe benefits EXCEPT:
prize in company-sponsored sales contest.
third-party sick pay relative to an employer’s contribution.
severance pay.
employer contributions to health plans– Correct Answer
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The IRS safe-harbor rules allow employers the ability to determine if a health insurance plan is affordable if the lowest employee contribution is no more than 9.12% of the employee’s wages as reported in Box 1 of Form W-2, is no more than 9.12% of the employee’s rate of pay at the beginning of the coverage period, or does not exceed 9.12% of the federal poverty line for a single individual for the applicable calendar year.
For more information, refer to Module 11, Lesson 4
The IRS safe-harbor regulations provide that health insurance is affordable when the employee’s cost does not exceed 9.12% of the following amounts EXCEPT:
- in Box 1 of Form W-2.
- in Box 3 of Form W-2. – Correct Answer
- rate of pay at the beginning of the coverage period.
- federal poverty level.
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An ALE not offering all its full-time employees affordable, minimum essential health insurance coverage that provides minimum value may be liable for an ESR payment.
For more information, refer to Module 11, Lesson 4
An Applicable Large Employer (ALE) may be liable for an Employer Shared Responsibility (ESR) payment in all of the following situations EXCEPT:
- the ALE offers unaffordable coverage to all full-time employees.
- the ALE does not offer health coverage to its full-time employees.
- a full-time employee is offered coverage and does not receives a premium tax credit.
- the ALE offers affordable minimum essential coverage that provides minimum value to all full-time employees, spouses, and dependents. – Correct Answer
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A Preferred Provider Organization (PPO) is a health care delivery system that gives the plan’s participants a choice of higher level of benefits and lower out-of-pocket costs if they use doctors who are part of the PPO network.
For more information, refer to Module 11, Lesson 1
Which type of health plan provides a choice of a higher level of benefits and lower out-of-pocket costs if the plan’s participant uses providers who are in the network?
- State Health Care Exchanges
- Health Maintenance Organizations
- Traditional Health Insurance Plans
- Preferred Provider Organizations– Correct Answer
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Under IRS rules, qualified medical expenses include insulin and medicines prescribed by a physician, including over-the-counter medications prescribed by a physician.
For more information, refer to Module 11, Lesson 2
Eligible medical expenses under a qualified health care plan do NOT include:
- medicines prescribed by a licensed physician.
- beneficial over-the-counter dietary supplements – Correct Answer
- over-the-counter medicines prescribed by a licensed physician.
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Under a traditional health insurance plan, the employer either purchases an insurance policy from a third-party insurance carrier or self-insures and pays claims to employees and health care providers from its own funds. Health insurance plans include traditional health insurance plans, HMOs, and PPOs.
For more information, refer to Module 11, Lesson 1
Of the following health plans, which is not considered a health insurance plan?
- Health maintenance organization plan
- Preferred provider organization plan
- Health reimbursement arrangement plan– Correct Answer
- Traditional health insurance plans
