Employment Law Blog

News, trends and analysis in employment law and HR

Jan 20, 2012

IRS issues more guidance on Form W-2 reporting of health coverage

Employee Benefits 
Do you have lingering questions about how to report the value of employees employer-provided health coverage on their 2012 Forms W-2?

Do you have lingering questions about how to report the value of employees’ employer-provided health coverage on their 2012 Forms W-2? The IRS recently released IRS Notice 2012-9, offering clarification and additional guidance on how to report, including:

 

  • Employers that are federally recognized Indian tribal governments are not subject to the reporting requirement, nor are tribally chartered corporations wholly-owned by a federally recognized Indian tribal government (Q/A-3).
  • Clarifies the reporting requirement for related employers not using a common paymaster (Q/A-7).
  • If an employee makes pre-tax contributions under a health flexible spending arrangement (FSA) and no employer contributions are made to the FSA, there is no reporting requirement for the FSA coverage (Q/A-19).
  • Explains how to calculate the reportable amount for employers who charge a composite rate (Q/A-28).
  • Employers are not required to report the cost of coverage under an employee assistance program (EAP), wellness program or on-site clinic if the employer does not charge a premium for those benefits (Q/A-32).
  • Employers may voluntarily report the cost of coverage under plans that are not required to be reported, such as contributions to a health reimbursement arrangement (HRA) (Q/A-33).
  • A Form W-2 provided by a third-party sick pay provider is not subject to reporting (Q/A-39).

The IRS also restated that the reporting requirement does not make the coverage taxable, and that employers who were required to file fewer than 250 Forms W-2 for 2011 are not required to report on 2012’s Form W-2. Have questions? Contact Kristine Bingman.

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