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"AOI understands that access to and affordability of healthcare is crucial to Oregonians. AOI actively supports legislation that looks at public private partnerships that addresses this key issue of Oregonians, even if it means opposing politically popular mandates.”
--Dennis Rea, President, H.T. Rea Farming Corp.
IRS Issues Guidelines on Non-Taxable Adult Child Health Care Coverage
Article by: Betsy Earls - May 11, 2010
Health coverage provided for an employee's children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010, according to the Internal Revenue Service.
The IRS announced on April 27, 2010, that these changes allow employers with cafeteria plans to permit employees to begin making pretax contributions to cover health care related costs of children up to age 27. These contributions may begin as of March 30, 2010, even if the employer has not yet amended the plan documents. The plan must be amended by the end of 2010.
IRS Notice 2010-38 ( http://www.irs.gov/pub/irs-drop/n-10-38.pdf) explains these changes and provides multiple examples.
This IRS Guidance should not be confused with the new law's requirement to provide coverage for dependent children up to age 26. There are some differences in how the PPACA and the IRS treat children in this age range.
Specifically, the guidance clarifies that:
- The changes imposed by the health reform law extend coverage to children up to age 26 effective for plan years beginning on or after Sept. 23, 2010.
- The Internal Revenue Code creates an income tax exclusion for heath care costs for children under age 27 as of the end of a taxable year, effective as of March 30, 2010.
This expanded health care tax benefit applies to various workplace and retiree health plans. It also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.
Employees who have children who will not have reached age 27 by the end of the year are eligible for the new tax benefit from March 30, 2010, forward, if the children are already covered under the employer's plan or are added to the employer's plan at any time.
Education – Engaging the decision makers.
AOI is engaging in new rounds of meetings with key legislators about what the business community needs to see from the state's higher education system.
Removing Court Bottlenecks
AOI is meeting with representatives of the Oregon Court system, including the chief justice of the Oregon Supreme Court, about court funding needs and how to make the system work more quickly and smoothly.
