Implementation of the new health care law reached another important milestone today.

As of today, all employers with 11 or more employees are required to establish Section 125 plans that enable their employees to buy health insurance on a pre-tax basis.  These plans result in significant cost-savings for individuals, and also reduce federal payroll tax obligations for employers.  Employers that fail to adopt and maintain a Section 125 Plan may be responsible for the medical bills accumulated by employees or their dependents who receive care from the state’s free care pool under the law’s Free Rider Surcharge provision.

Employers are also required to file Health Insurance Responsibility Disclosure (HIRD) forms with the state, indicating that the company maintains a Section 125 plan and whether or not it contributes to the premium costs of a group health plan for its employees or offers an employer sponsored group health plan.

Those employees that have declined to enroll in employer sponsored group health plan or to participate in the employer’s Section 125 Plan must also file a HIRD form.

For more information on employer requirements of the health care reform law, click here.