written by Patti Stoner
Mandatory reporting on Form W-2 for the cost of health coverage they provide to employees begins for the calendar year 2012 (prepared and issued in January 2013) for any applicable employers who issued 250 or more W2s for 2011. For smaller employers, those issuing less than 250 W2s in the prior year, it is voluntary until the IRS issues further guidance. The aggregate cost of applicable employer-sponsored coverage must be included in their W2.
These costs include:
- Coverage under any group health plan made available to the employee by the employer or would be excluded from the employee’s income.
- Coverage shall be treated as applicable employer-sponsored coverage without regard to whether the employer or the employee pays for the coverage.
These costs do not include:
- Employee’s contributions to: Archer MSA, Health savings account or Flexible spending arrangement (FSAs)
- Costs for long-term care policies
- Separate dental insurance policies (if it is not included in the health insurance policy)
- Separate vision insurance (if not included in the health insurance policy)
- Accident insurance
- Disability income insurance
- Liability insurance, including general liability and automobile liability insurance
- Workers’ compensation or similar insurance
- Automobile medical payment insurance
- Credit-only insurance
- Other insurance which benefits for medical care is secondary or incidental to the other insurance benefits
- Coverage only for a specified disease or illness (cancer policy)
- Hospital indemnity or other fixed indemnity insurance
- See the IRS’ website for Q&A’s that have been submitted to date: http://www.irs.gov/uac/Employer-Provided-Health-Coverage-Informational-Reporting-Requirements:-Questions-and-Answers
Purpose of this Reporting
Officially, the IRS says the purpose of the reporting is to provide useful and comparable consumer information to employees on the cost of their health care coverage. We speculate it is a tool that will be used more for the government in its evaluation of this massive health care law.
If you need assistance in determining this filing requirement’s applicability to your company or you need assistance preparing your W2 forms, please contact our Small Business Service department at 417-881-0145.