Since we are still getting questions from some employers, here is a brief recap of the PPACA requirement that large employers report the total cost of employer-sponsored group health coverage on 2012 W-2s that must be issued by January 31, 2013.
What Employers Must Report?
Employers who issued at least 250 W-2s in 2011 must report on 2012 W-2s. The 250 W-2s include those for all employees, whether you classified them as full-time, part-time, seasonal or temporary employees.
What Data Must be Reported on the W-2?
- Employer and Employee contributions for major medical and prescription drug coverage
- Employer contribution for health flexible spending accounts (HFSAs) (and payments from HFSAs) that exceed the employee’s pre-tax HFSA contribution for the year
- Employee pre-tax contribution for hospital indemnity or specific illness policies (e.g., AFLAC cancer policy)
- Domestic partner coverage included in the employee’s gross income
- Cost of Employee Assistance Plan (EAP), wellness program and onsite medical clinic, only if they provide “healthcare” coverage and employer charges a COBRA premium for continued coverage.
Suggestions on where to Find the Data You Need to Report
- Insured plan sponsors: Review your 2012 bills from you carrier
- Self-insured plan sponsors: contact your COBRA vendor for a COBRA rate
- Review each employee’s 2012 payroll data (for pre-tax contributions to hospital indemnity or specific illness plans, and for imputed income for domestic partner coverage)
What Data Are You Not Required to Report on the W-2s?
- Dental or vision coverage that gives the choice of declining, or electing and paying an additional premium (but employer can choose to report)
- Dental or vision that is not integrated with a major medical plan (but employer can choose to report)
- Employee pre-tax contributions to a health flexible spending account (HFSA)
- Health Reimbursement Account (HRA) contributions (but employer can choose to report)
- Health Savings Account (HSA) contributions by the employer or employee
- Hospital indemnity or specific illness policies (e.g., AFLAC cancer policy) paid by the employee on an after-tax basis
- Report the health care cost information in Box 12 of the W-2, using Code DD
- The reporting is for informational purposes only. It does not change the taxability of the benefits.