New W-2 Reporting Requirements

 

 

Given the recent Supreme Court decision upholding the individual mandate of the Affordable Care Act, there is a lot of confusion over whether or not, and when, specific employer reporting requirements will be applicable.  The IRS recently issued a chart illustrating the different coverage employers must report on their W-2 forms when reporting employer-sponsored health coverage in which is required under the Affordable Care Act.

 

The new W-2 reporting requirements applies to the 2012 tax year for employers who issued at least 250 W-2′s in 2011 and who provide “applicable employer-sponsored coverage” under a group health plan whereas for smaller employers the reporting requirements won’t take affect until the 2013 tax year.

 

Future guidance may revise reporting requirements but the additional reporting requirements won’t be applicable until the tax year beginning at least 6 months after the date that the new guidance is implemented.

 

For more information visit www.healthreformupdates.com.  If you need help on simplifying benefit strategies to consolidate election, eligibility and billing administration for all plans or questions about the impact for this and other rules under the act, contact me at kschneider@richmanknoll.com.

 

 

Form W-2 Reporting of Employer-Sponsored Health Coverage

Coverage Type

Form W-2, Box 12, Code DD

Report

Do Not Report

Optional

Major medical

X

Dental or vision plan not integrated into another medical or health plan

X

Dental or vision plan which gives the choice of declining or electing and paying an additional premium

X

Health Flexible Spending Arrangement (FSA) funded solely by salary-reduction amounts

X

Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits

X

Health Reimbursement Arrangement (HRA) contributions

X

Health Savings Arrangement (HSA) contributions (employer or employee)

X

Archer Medical Savings Account (Archer MSA) contributions (employer or employee)

X

Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis

X

Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer

X

Employee Assistance Plan (EAP) providing applicable employer-sponsored healthcare coverage

Required if employer charges a COBRA

Optional if employer does not charge a COBRA

On-site medical clinics providing applicable employer-sponsored healthcare coverage

Required if employer charges a COBRA premium

Optional if employer does not charge a COBRA premium

Wellness programs providing applicable employer-sponsored healthcare coverage

Required if employer charges a COBRA premium

Optional if employer does not charge a COBRA premium

Multi-employer plans

X

Domestic partner coverage included in gross income

X

Governmental plans providing coverage primarily for members of the military and their families

X

Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government

X

Self-funded plans not subject to Federal COBRA

X

Accident or disability income

X

Long-term care

X

Liability insurance

X

Supplemental liability insurance

X

Workers’ compensation

X

Automobile medical payment insurance

X

Credit-only insurance

X

Excess reimbursement to highly compensated individual, included in gross income

X

Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income

X

Other Situations

Report

Do Not Report

Optional

Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers)

X

Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of that year

X

Forms W-2 provided by third-party sick-pay provider to employees of other employers

X