Health Care Reform: Form W-2 Reporting
The health care reform law requires employers to report the total cost of employer-sponsored group health plan coverage on their employees’ Forms W-2.
The purpose of this reporting requirement is to provide information to employees regarding how much their health coverage costs. It does not mean that the cost of the coverage is taxable.
What Information Must Be Reported?
These include employee contributions to a health flexible spending account (health FSA), non-integrated dental or vision plans, health reimbursement arrangements (HRAs), multiemployer plan coverage, long-term care coverage and excepted benefits like liability insurance.
Employers must report the total cost of certain types of employer-sponsored health coverage. In general, this means coverage under group health plans.
It does not matter whether the employer or the employee pays for the coverage—it is the total cost of the coverage that must be reported. This means both the employer- and employee-paid portions.
Some coverage types do not need to be reported on Forms W-2.
The new reporting requirement does not apply to amounts contributed to an Archer medical savings account (Archer MSA) or amounts contributed to a health savings account (HSA). Those amounts are already required to be separately accounted for on Forms W-2.
Do All Employers Have To Report This Information?
In general, all employers that provide health coverage to employees must comply with the new reporting requirement.
This requirement applies to government entities, churches and religious organizations. However, it does not apply to Indian tribal governments or tribally chartered corporations wholly owned by an Indian tribal government.