Tax. News and Tips

• Up to $5,250 of educational assistance benefits received from the employer are deductible each year ... (read more)
• Virginia has amended its law relating to background checks in nursing homes ... (read more)
• West Virginia has adopted the Nurse Overtime and Patient Safety Act ... (read more)
• In Pennsylvania public and private employers are prohibited from discharging or otherwise discriminating against an employee ... (read more)
• Connecticut releases its UI contribution rates ... (read more)

Employee Benefits

Enrollment in consumer-directed health plans (CDHPs) will continue to grow in 2004 ... (read more)

Facts. Did you know that ...

Participation rate for 401(k) plans in 2003 is down ... (read more)

92% of stocks on the S&P 500 that gained in 2003 ... (read more)

CustomPay Payroll Online allows you and your accountant access your payroll information from anywhere. Click here to see the demo.

IRS final regulations provide for voluntary furnishing of electronic payee statements
Recently-issued IRS final regulations provide for the voluntary electronic furnishing of statements on Form W-2 (Wage and Tax Statement). Employers that are required to file Form W-2 with respect to an employee must furnish a written statement on Form W-2 to the employee. Under the regulations, subject to an employee's consent, the written statement may be furnished electronically.

Enrollment in consumer-directed health plans is growing

Enrollment in consumer-directed health plans (CDHPs) will continue to grow in 2004 as employers search for ways to control double-digit increases in health care benefit costs, according to a study by the National Business Group on Health and Watson Wyatt Worldwide. The establishment of Health Savings Accounts (HSAs) also should contribute to the implementation of high-deductible health plans. HSAs can be paired with high-deductible health plans to encourage employees to become more price sensitive when purchasing health care.
Enrollment in CDHPs will grow to 478,000 in 2004, up from 169,000 in 2003. Nearly one-third (32 percent) of large companies expect to offer a CDHP to workers next year, compared to 21 percent that currently offer such a plan. However, few employers offer them as the only option to their employees. A total of 159 large companies and 9 primary health plans providing CDHPs participated in the survey.
CDHPs allow organizations to give workers flexibility in making decisions about their health care benefits coverage. Most plans include cost-sharing provisions, high deductibles, a health reimbursement account (HRA) or health savings account (HSA), and tools and resources to help workers become smarter health care consumers. Although costs are primarily driving increased interest in CDHPs, employers cited various reasons for implementing a plan.One out of four (24 percent) respondents cited their confidence that a consumer-directed health plan would reduce overall health plan costs as their primary reason for offering a plan. Slightly fewer (22 percent) said increasing employees' price sensitivity to healthcare decisions led them to implement a plan.
Most employers (76 percent) who offer a plan said employee enrollment in the first year of the program was either at or above the expected level. The remaining 24 percent experienced lower than expected enrollment levels.
However, first-year enrollment levels, ranging from 1 percent to a high of 33 percent, were low relative to enrollment in traditional plans. The survey found that how well the plan was communicated was a primary determinant of enrollment levels. The survey asked companies without CDHPs why they have not yet adopted one.Nearly three out of ten (29 percent) said there isn't enough experience with these types of plans to demonstrate their effectiveness, while 20 percent did not think these plans would effectively manage costs.