April 4, 2012
Legislative Update [All Markets]
Employers Responsible for W-2 Reporting
As part of the Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan. This applies to both self-funded (ASO) and fully insured employer groups.
Complying with the mandate is the responsibility of the employer. Therefore, employers are encouraged to consult with their tax and legal resources for assistance with meeting the reporting requirements.
Beginning in January, employers that were required to file at least 250 2011 W-2 forms were required to start tracking the total cost of health care coverage for tax year 2012. This information will be reported to the Internal Revenue Service on employee W-2 forms that will be issued in early 2013. This reporting is for informational purposes only and does not affect an employee’s tax liability.
However, for small groups (employers that were required to file fewer than 250 2011 W-2 forms), reporting will continue to be optional for the 2012 tax year.
“Applicable employer-sponsored coverage” generally means coverage under any group health plan made available to the employee by an employer, which is excludable from the employee's gross income under the Internal Revenue Code. The coverage is typically excludable from the employee’s gross income under the Internal Revenue Code, or non-taxable.