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As discussed in our previous Legal Alert, one of the changes made by the Patient Protection and Affordable Care Act (PPACA) concerning employer-sponsored health coverage is that employers would now be required to report the employer-paid costs of that health coverage on employees' Forms W-2. In Notice 2010-69, the IRS delayed this new reporting requirement until the 2012 Forms W-2 (i.e., those that are filed in early 2013), although employers still had the option to report the cost on Forms W-2. See our earlier Alert, "Do Employers Need to Report the Amounts that They Pay for Employees' Health Insurance?" at http://www.fordharrison.com/shownews.aspx?show=6690.
IRS has now provided further interim guidance, in Notice 2011-28, which confirms that reporting is still not required until the 2013 filing of the 2012 Forms, whether or not it is voluntarily reported earlier. However, reporting will remain voluntary for certain "small employers" until further guidance is issued, but at least through the filing of the 2012 Forms W-2. IRS also provided some detailed guidance for employers that become subject to the rule, and for those employers that remain exempt but voluntarily choose to comply.
Under the new Notice, "small employers" for a year are those filing fewer than 250 Forms W-2 for the preceding year; those employers won't have to report the cost of health care coverage on Forms W-2 that are required to be furnished to employees before January 2014, at the earliest, when W-2s are filed for 2013.
For employers who are required to report on the 2012 Forms W-2, and for employers who voluntarily choose to report on either 2011 or 2012 forms, detailed guidance is provided on such topics as: general requirements; methods for reporting the cost of coverage; definitions of terms relating to the cost of coverage required to be reported; the types of coverage for which the cost is required to be reported; methods used to determine the cost of coverage; and other issues that may arise in determining the cost of coverage.
Some other issues are addressed in the Notice, including how mid-year changes in cost should be handled, but additional IRS guidance undoubtedly will be issued before the requirement goes into effect.
If you have any questions about the Notice or about the Act's reporting requirements, please contact the author of this Legal Alert, Jeffrey Ashendorf, at email@example.com, any member of Ford & Harrison's Employee Benefits practice group or the Ford & Harrison attorney with whom you usually work.
You may also visit the health care reform section of the Ford & Harrison web site, http://www.fordharrison.com/HealthcareReform.aspx, for more helpful resources and tools on health care reform.