Compensation Solutions Blog
Human Resources Outsourcing (HRO – PEO – ASO – Payroll – Agency)

New Regulations Regarding Health Care Costs on Employee W-2 Forms

Continuing with our discussion of Healthcare Reform is the requirement of employers who are filing more than 250 W-2 forms to report the cost of employer-sponsored health care coverage on employees’ W-2 forms in January 2013.  Though the cost will be reported on the employee’s W-2 form, the reporting is only for informational purposes and at this point, the employee will not be taxed on the reported amount.  The amount listed on the employees’ W-2 forms must include both the employee-paid portion and the employer-paid portion.  Transition relief, provided by IRS Notice 2012-9, states that certain employers and certain types of coverage will be excluded from the requirement to report costs on employees’ W-2 forms.  Some of these exclusions include, but are not limited to, employers filing less than 250 W-2 forms, dental and vision plans that are not part of a health plan and/or where participants are able to reject the coverage or pay additional premium for accepting the coverage.

For more detailed information regarding reporting health care premiums on W-2 forms, please see the IRS Q & A