The Internal Revenue Service (IRS) March 29 issued interim guidance on a provision in the Patient Protection and Affordable Care Act that will require employers to report the cost of coverage under an employer-sponsored group health plan on each employee’s W-2 form. The guidance has been released for employers who opt to do the reporting beginning on the 2011 W-2 forms; however, the reporting does not
become mandatory until 2012 and will have to be included on 2012 W-2 forms, usually furnished to employees in January 2013.
The guidance covers how to report the information, what coverage to include and how to determine the cost of the coverage. The IRS again stressed that the reporting to employees is to inform them of the cost of their health coverage and the amounts reportable are not taxable.
Although employers will generally be required to comply with the provision on 2012 W-2 forms, additional transition relief is being provided to certain employers and certain types of coverage. For more information, visit the
frequently asked questions page on the IRS website.
In addition, the IRS is requesting comments on any difficulties employers may have complying with this provision and how to improve future guidance. Instructions for filing comments can be found in the interim guidance.