Guidance on W-2 Health Coverage Reporting: Multiemployer Plans Exempt, Single Employer Plans Limited

On January 3, 2012, the IRS issued Notice 2012-9, which provided new guidance on the reporting of employer-provided group health insurance coverage.  The Affordable Care Act (ACA) requires that all employers report the cost of health insurance coverage on employees’ W-2 forms beginning with the 2012 tax year.  Multiemployer plans are exempt from this requirement of the ACA.  For plans subject to the reporting requirement, IRS Notice 2012-9 clarified the requirements, which generally allow for significant employer flexibility in reporting, including but not limited to the following:

• Small employers filing fewer than 250 Forms W-2 are exempt from the reporting requirement;

• Flexible spending account (FSA) employee salary deductions need not be included in this reporting requirement;

• Employee Assistance Programs (EAPs), wellness programs, and on-site clinics need not be included unless the coverage is provided under a program considered a group health plan;

• Employers have the option to report of coverage not required to be reported, such as health reimbursement arrangements (HRAs), multiemployer plans, EAPs, wellness programs, and on-site medical clinics;

• Employers allowed to allocate costs to a portion of program not subject to reporting rules, so long as allocation is reasonable;

• Employers need not report amounts paid by a third-party sick pay provider;

• A dental plan or vision plan is subject to the reporting requirements pursuant to the same rules as HIPAA.

For more information regarding ACA’s W-2 health coverage reporting requirements, please contact your Trust Fund counsel.

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Author: Kristina Zinnen