Health Care Reform W-2 Reporting Guidance

The IRS has  issued guidance regarding the new Form W-2 requirements under health care reform that require employers to report the cost of coverage under an employer-sponsored group health plan. 

Note:  Employers who are required to file fewer than 250 2011 W-2 Forms are not required to report this information.  Only those employers with greater than 250 W-2’s in 2011 must comply.

Below are some of the highlights of the guidance:

Purpose

• The purpose of the new W-2 information is to provide employees information on the cost of their health care coverage.

Effective Date

• The guidance generally applies beginning with 2012 W-2 Forms that employers must provide to employees in January 2013.  W-2 Forms provided to employees terminating during 2012 and requesting a W-2 Form prior to the end of the calendar year need not comply with the new requirements.
• Employer-provided health coverage will remain non-taxable to employees (except for special situations, such as domestic partners or non-dependent imputed income).

Scope of Health Plan

• Employers can exclude the value of health reimbursement accounts and stand alone  dental and vision plans when they report  in2012.
• Also excluded are health flexible spending accounts and HSAs.  However, any employer contributions (not salary reduction) made to the health flexible spending account would be included.

Amount Reported

• The amount reported on the W-2 Form must include both the employer and the employee paid portions of health care coverage, whether pre-tax, after-tax or taxable.

How M.F. Irvine Can Assist

For existing M.F. Irvine Benefit Administration clients, M.F. Irvine Corporate Solutions will be providing  a special report at the end of the 2012 calendar year (early January 2013).  This report will include the total value of the Medical Plan (i.e., the COBRA applicable premium minus the 2%) for active and terminated employees for the 2012 calendar year.

If you have any questions, please contact your M.F. Irvine Representative.

Source: IRS Notice 2011-28