W-2 REQUIREMENTS FOR COMPANIES PER AFFORDABLE CARE ACTBondBeebe
Brian Wynne, CPA
You may have new reporting responsibilities when filing your W-2’s this month. Employers sponsoring group coverage will have new reporting responsibilities according to the Affordable Care Act and the Internal Revenue Service. You may need to report costs associated with employer-sponsored health coverage on IRS Form W-2.
The Patient Protection and Affordable Care Act requires employers who issue 250 or more W-2’s in a year to report the aggregate cost of coverage under an employer-sponsored group health plan in Box 12 of each employer’s W-2, using code DD.
In general, the amount reported should include both the employer and employee-paid portions of the group health coverage. The IRS states this reporting is for information purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.
Most types of organizations are required to report, including businesses, tax-exempt organizations, and federal, state, and local government entities. Federally-recognized Indian tribal governments and employers contributing to a multi-employer plan are exempt from this requirement.
In addition, employers with self-insured group health plans not subject to federal continuation coverage requirements (COBRA, ERISA or the Public Health Services Act) and employers who issued fewer than 250 W-2’s for the preceding calendar year are not required to report for the 2012 calendar year.
Click here for a helpful chart showing the types of coverage that must be reported.