Groups filing 250 or more W-2 forms are required to report to employees the total cost of their employer-sponsored group health plan coverage under the Patient Protection and Affordable Care Act. The W-2 reporting requirement begins with the 2012 W-2 forms furnished to employees in January 2013.

Keep in mind that this requirement is informational only and does not mean that employer-sponsored coverage is subject to income tax.

What Not to Report

HIPAA “excepted benefits” plans (accident, disability income, supplemental liability, workers’ compensation insurance) are not subject to the W-2 reporting requirements.

Health flexible spending accounts (FSA) funded solely through employee salary reductions are not reportable. Employers are required to report the FSA value when it exceeds the employee’s cafeteria plan election for all tax favored benefits. In addition, coverage under a health reimbursement account/arrangement (HRA) may be reported on the W-2 at the option of the employer.

Form W-2 Reporting of Employer-Sponsored Health Coverage

The W-2 Reporting: IRS Recap of What to Report chart outlines what coverage should and should not be reported on the W-2 form.

For further assistance, please contact your Stellar representative today.