“Large” Employers Must Report Healthcare Costs on Employee W-2– December 05, 2012 by Angel Rice

Starting with the 2012 year, the Patient Protection and Affordable Care Act (PPACA) requires employers to report the cost of coverage under its group health plan. For now this applies only to employers who filed at least 250 form W-2s for the 2011 calendar year.

Employers subject to the reporting requirement generally include any employer that provides “applicable employer-sponsored coverage” during a calendar year, including businesses, not-for-profit organizations and government entities.

The value of coverage will be reported in Box 12 of the W-2 and, for most plans, includes both the employer and employee contributions to the plan. Determining the value will be a slightly different process depending upon if the plan is self funded or fully funded. Employers are encouraged to coordinate with their benefits and payroll providers to help meet these reporting requirements. The IRS has also posted significant guidance, including common questions and answers and a chart illustrating the types of coverage that must be reported.

Additional guidance is expected in 2013 for small employers. Any guidance that expands the reporting requirements will only go into effect for calendar years that start at least six months after issuance. Said another way, if guidance is not forthcoming by the end of June, small businesses will not have to report for the 2013 calendar year.

If you have any questions or would like more information please contact Angel Rice at arice@cohencpa.com.


This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

Notwithstanding that these materials do not constitute legal, accounting or other professional advice, as may be required by United States Treasury Regulations and IRS Circular 230, you should be advised that these materials are not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding penalties that may be imposed under federal tax laws. No written statement contained in these materials may be used by any person to support the promotion or marketing of or to recommend any federal tax transaction(s) or matter(s) addressed in these materials, and any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any such federal tax transaction matter.