While many of the expected changes due to the Affordable Care Act are not yet actionable, Employers must make changes to the way it reports healthcare coverage on W-2s.

PURPOSE OF REPORTING HEALTHCARE COVERAGE

· Reporting the value of health coverage is for purely informational purposes

· Reporting will not affect the taxable income of the employee

WHICH EMPLOYERS MUST REPORT VALUE OF HEALTH COVERAGE

· All employers providing health coverage (including all governmental entities)

· 2 Exceptions:

  1. Temporary Exception – Employers with fewer than 250 employees the previous calendar year

§ Your business should begin the process of implementing changes to allow you to report in the future.

§ Employers with less than 250 employees may voluntarily report the value of health coverge

  1. Indian Tribal Governments

· Reporting the value of employer-sponsored health coverage is MANDATORY for 2012

· Value must be included in W-2s provided to employees on January 2013

WHAT IS REQUIRED TO BE REPORTED ON W-2S

· Value of Employer-sponsored group health coverage

o W-2 must include the value of all group health coverage

· Exceptions:

o Health Savings Account (HSA) contributions

o Health Reimbursement Account (HRA) contributions

o Flexible Spending Account (FSA) salary deferrals

o Dental and Visions Coverage (if not included in health/medical coverage)

o Long-Term Care Insurance Coverage

o Employee Assistance Programs

o Coverage not subject to Cobra

o Multi-Employer Health Coverage

WHAT MAY BE REPORTED ON W-2S

· Employer may choose to report the following:

o HRA contributions

o Dental/Vision Coverage (if not included in health coverage)

o

o Employee Assistance Programs

· Reporting would give employees the total value of the healthcare package offered by Employer

o Employer should weigh the positive and negative attributes of reporting such information on employee W-2s

WHAT MAY NOT BE REPORTED

· In no circumstances may an Employer report HSA Contributions or Employee Salary Deferrals on the W-2 form issued to employees

The information you obtain in this guide is not intended to be formal legal advice. You should consult an attorney for advice regarding your individual situation. Although we strive to provide accurate information, the law changes from time to time and is different from jurisdiction to jurisdiction; therefore, we cannot assume any liability for the content, accuracy, or any other aspect of the information herein. We invite you to contact us and welcome your calls, letters and electronic mail. Your initial contact to us does not, however, create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.