Employee Benefits Compliance, Large Employers, Reporting Requirements

Form W-2 Reporting of Health Care Costs in 2012

Large employers –-defined as those who issue at least 250 W-2s for 2011—are required to report the aggregate cost of applicable employer-sponsored group health coverage on Form W-2 starting with the 2012 tax year. Such employers should ensure that procedures are in place by January 1, 2012 to adequately capture the necessary information each payroll period. This reporting requirement applies to both grandfathered and non-grandfathered plans but does not apply to smaller employers until the 2013 tax year. Reportable aggregate cost includes both employer contributions and pre-tax and after-tax employee contributions. Aggregate reportable and non-reportable costs are defined in IRS Notice 2011-28 and should be reported in box 12 on Form W-2, using code DD. Reporting is for informational purposes only; it does not affect the taxability of the coverage.

The W-2 Reporting Matrix details the types of health care coverage or cost that large employers should and should not report on Form W-2 for 2012.