2012 Employer-Sponsored Health Care Reporting Requirements
The Affordable Care Act provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2. However, depending on the number of W-2s your company will file, as well as a number of other criteria, your company could be exempt from the reporting requirement. Guidance from the Internal Revenue Service (IRS) provides relief for smaller employers (those filing fewer than 250 W-2s) by making this reporting requirement optional for them in 2012. For clarification, the 2012 Forms W-2 are those that generally would be furnished to employees in January 2013. This optional treatment for smaller employers will be continued until further guidance is issued.
The Reporting Requirement and Your Payroll
Unless your company meets the criteria relieving it of the new reporting requirements, then applicable employer-sponsored coverage amounts under a group health plan are subject to the reporting requirement. This includes federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families), churches and other religious organizations, and employers that are not subject to the COBRA continuation coverage requirements. The cost of these health care benefits must be reported in Box 12 of the Form W-2, with Code DD to identify the amount. For detailed guidance, refer to the IRS Notice 2011-28, “ Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage”.
APS Customer Note
Are Amounts Reported on Form W-2 Taxable To The Employee?
No. The reporting requirement will not cause employer-provided health coverage to become taxable. This question and many other commonly asked question are answered by the IRS at the IRS Q&A webpage.