The Patient Protection and Affordable Care Act stated that as of 2012, employers issuing 250 or more IRS W-2 forms in 2011 need to include the “aggregate” cost information regarding certain employer sponsored group health coverage. The total W-2 issued count applies to all employees even those not eligible and those who didn’t participate in a covered group health plan. As of 2013, this new W-2 reporting requirement will extend employers of all size and every W-2 issued will require this information.
The purpose of this new amendment was said to help employees understand the costs of such coverage. At this time, the reporting of group health costs is said to be informational only and will not be taxed under this provision. Cost information that should be reflected on the W-2 includes any group health plan made available to employees that is not otherwise taxable to employees. Even plans that the employer did not directly contribute to need to be shown on the W-2 and this directive extends to plans for current or former employees and their families, if applicable.
To find out more about these new requirements, please contact your employee benefits specialist here at Chapman.