Gearing up for the 1099 onslaught

Businesses need to anticipate a flurry of 1099s in 2012. Hidden deep within the recently enacted healthcare reform bill are new 1099 reporting requirements that will place significant demands on your time and resources. With this one tax change, you could find yourself filing hundreds more 1099s just to comply.

Under current law, you are required to record the income payments you make each year to non-employees on a 1099-MISC form. When the total payments to independent contractors, consultants, attorneys, vendors, healthcare professionals, trainers, freelancers and other non-employees exceed $600 in a calendar year, you issue a 1099 to the individual and file it with the IRS.

Beginning next year, many more payments will be subject to the expanded 1099 rules. For the first time, you’ll also issue 1099s to corporations - and for virtually all goods that exceed $600 in a calendar year.

When you consider all the payments you make in the course of running your business – from computer equipment and office supplies to janitorial services and overnight package delivery – you realize just how many 1099s this will entail.

Why the health care reform bill contains a 1099 change ...

The obvious question for most businesses is, “How did this sweeping tax change end up in the health care reform bill?”

Blame it on the burgeoning federal deficit. The tax change is expected to help the IRS capture an estimated $345 billion in new tax revenues, as well as offset the cost of the historic health care legislation. The reporting requirements have been on the IRS’ radar for a long time, and they finally made it in the health care reform bill.

Plan ahead so you're fully prepared

While we won’t know the ultimate impact of the new law until the IRS issues its final regulations, we do know it’s not too soon to plan for how you’ll manage the spike in 1099 filings. Stay tuned for more details on the new requirements, as well as tips for easing the paperwork burden.

Gearing up for the 1099 onslaught

Are you dishing the right details about dependent eligibility?

With all the confusion surrounding the dependent coverage rules under the health care reform bill, we’d like to take a moment to provide some clarity.

First things first: The definition of an eligible dependent is a biological or legally adopted child up to age 26, even if married.

Just as important, you must comply with the new eligibility rules if your plan year begins on or just after September 23.

Some of the eligibility rules to keep in mind:

=> Dependents don’t need to be enrolled in school or be financially dependent on their parents
=> The spouses or children of adult dependents aren’t eligible for coverage
=> You must invite all dependents back during your company’s enrollment period – including those previously dropped or whose parents opted out of your plan

As you might imagine, a change like this requires some targeted communication on your part. This means reviewing and updating all your company’s printed and electronic information (such as enrollment materials and benefits-related websites) to include the new dependent definition and eligibility guidelines.

Are you dishing the right details about dependent eligibility?

Automatic health care enrollment kicks in for large employers

Under the Patient Protection and Affordable Care Act, employers with more than 200 full-time employees must automatically enroll new employees in one of their health benefit plans and continue the enrollment of current employees.

Keep in mind, however, that the automatic enrollment provision needs to include ample notice – and a chance for an employee to opt out of the coverage and choose another option (or opt out altogether). Automatic enrollment may be subject to a legal waiting period, too.

Like with auto-enrollment in 401(k)-type plans, this change is expected to increase participation in employer-sponsored health care plans and ensure coverage for more Americans.

Check back here for future updates on this and other health care reform requirements.

Automatic health care enrollment kicks in for large employers

When talk of health care reform turns ugly

Whether you support it or scorn it, it’s clear that the new health care reform law has hit a nerve with many Americans. In homes, restaurants, coffee shops and every meeting place in between, heated discussions about the intent and effect of the new bill can be heard. And like a couple of ill-tempered children squaring off on the playground, it’s not always pretty.

But what about the workplace? How far can employees take their political views while on the clock – and what if casual discussions escalate and cross the line?

As a blogger over at LegalWorkplace.com so aptly suggests ...

While you can’t request that employees couch all political discussions at work, you can step in if their water-cooler exchanges dampen their productivity or become nasty.

Bottom line: It’s completely unacceptable for any workplace conversation to intensify to the point of throwing around racial slurs or outright threats. More than that, it’s grounds for immediate disciplinary action. If you witness this (or are the target of such behavior), you should report it immediately to a manager or supervisor.

Most employers would be wise to remind their workforce to behave appropriately online, too. Facebook is not the place for respected professionals to “let down their guard” and spout off their political views. Again, it comes down to remaining calm and balanced, which some people struggle with when their political views are challenged. You never know who among your friends (and business associates) on Facebook is following your rants and questioning your integrity as a result.

Have you noticed more health care reform-related discussions in your workplace? Are employees keeping their emotions in check so healthy discussions don’t turn into harmful debates?

When talk of health care reform turns ugly