

		BCBSNC Announces Changes to Blue Points Program for 2010 Blue Cross Blue Shield of NC has announced changes to its Blue Points program that will affect tax reporting of redeemed incentives and the point balances for kids and teens participating in the program. These changes, which are effective January 1, 2010, are summarized below: Tax Reporting for Blue Points Redemptions In January, BCBSNC will begin tracking the retail value of Blue Points Incentives redeemed by members so as to properly report the potential tax implications of these incentives as required by law. Because the program has been enhanced to where members can generate $600 or more in redemptions in a calendar year, current tax law requires that non-employer income at such levels must be reported. Form 1099 is the current default tax reporting method for all groups, although self-funded (ASO) groups may elect W-2 redemption reporting. Blue Points Kids/Teens Points Accrual Kids (ages 6-12) and teens (ages 13-17) who participate in the Blue Points program will not be allowed to bank their accrued points and therefore must redeem all points by the last day of the group’s plan effective year. If any of your employees have dependents aged 6-17 participating in the Blue Points for Kids and Teens program, their point balances will be reset to “0” (zero) at the beginning of each effective year. Further, kids or teens will not be permitted to redeem points within one calendar year at a retail value level high enough to incur 1099 tax reporting ($600 or more). Members with questions regarding these changes can access a Frequently Asked Questions document, or call BCBSNC Customer Service at the toll-free number listed on their ID card. Should you have any additional questions about the changes to the Blue Points program, please contact our office at 919-403-1986. Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.
September 30, 2009 Hill, Chesson & Woody Employee Benefit Services 194 Finley Golf Course Road, Suite 200, Chapel Hill, NC 27517 Phone: 919.403.1986 Fax: 919.869-2063 www.hcwbenefits.com