With the start of a new year, public employers, both fully-insured and self-insured should consider how the Affordable Care Act (ACA) has changed W-2 form reporting requirements. Aiming to provide workers with more information about their healthcare costs, the IRS originally mandated employers report the aggregate cost of employer-sponsored group health plan coverage on their employees' W-2 form, beginning in the 2011 tax year. However, the IRS later made reporting optional for 2011 employees.
Currently, the W-2 reporting requirements only apply to businesses and government bodies that issue 250 or more W-2s. This means the new reporting standards are optional for employers with fewer than 250 issued W2s and will remain so until the IRS provides further guidance for the coming years. To view the ACA W-2 regulations, visit the IRS website.
Employers affected by the requirement must report information related to coverage under any group plan they offer that is excluded from the employee's gross income. It does not matter who actually pays for coverage.
Some types of coverage do not need to be reported under the W-2 requirement. These include:
For further information, please download our Legislative Brief: Form W-2 Reporting Requirements or view this video.
To notify employees of the change, feel free distribute the Benefit Bulletin to all your employees.