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Employer Provided Health Insurance
What Are Your W-2 Reporting Requirements?

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. To give employers more time to update their payroll systems, this requirement is optional for all employers in 2011. In 2012, the government will require any business filing 250 or more W-2 forms to report the cost of their health coverage. Health care reporting will be optional to small businesses that file less than 250 W-2 forms for at least 2012, and will continue to be optional until further guidance is released.

The 2011 Form W-2 is available for viewing and is the W-2 that most employees will receive in early 2012. Employers may use box 12, code DD, to report the cost of coverage under an employer-sponsored group health plan.

This health coverage reporting requirement is for informational purposes only. The purpose of this reporting is to show employees the value of their health care benefits, so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee’s income and is not taxable.

It’s important to note that this reporting requirement relates only to employer-sponsored group health plans. The reporting requirement does not include:

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