The IRS has issued new guidance for employers on Form W-2 reporting of the aggregate cost of their employer-sponsored health coverage for employees, as required by the Patient Protection and Affordable Care Act (PPACA). Under the new guidance, reporting continues to be voluntary for all employers in 2011 (2012 filing), and further states:

  • Reporting is voluntary for small employers that file less than 250 Forms W-2 for the previous tax year. This is effective for 2012 W-2’s (issued in January 2013) and future calendar years or until further guidance is issued.
  • Reporting is required for employers that will file 250 or more Forms W-2 for the year 2011. This is effective for 2012 W-2’s (which will be issued January 2013) and future calendar years or until further guidance is issued.
  • Employers do not have to issue W-2’s to individuals who would otherwise not receive a W-2.

The amounts of employer-sponsored health coverage reported on Forms W-2 are used for informational purposes only and are not taxable. The purpose of reporting the total value of an individual employee’s health benefits on their W-2 form is to educate employees about the benefit they receive through their employers, and at the same time gain awareness of the true cost to obtain health coverage.

If you have any questions regarding this information, please contact our office at (239) 433-5554.  Our team of professionals welcomes the opportunity to discuss your specific situation further. You may also visit us on the web at www.markham-norton.com.