Reporting Requirements

The Affordable Care Act (ACA) imposes new reporting requirements on employers.

W-2 Reporting on the Cost of Employer-Sponsored Health Coverage

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For taxable years beginning in 2012, the Affordable Care Act (ACA) requires employers to report the total cost of employer-sponsored group health coverage on Form W-2, which must be provided to the employee no later than January 31st of the year following the taxable year or, if a written request is made by a terminated employee, within 30 days of the request.

Employers are not required to report the cost of coverage for individuals who would not otherwise receive a Form W-2 (e.g., retirees). Until further guidance is issued, employers issuing less than 250 Form W-2s for the taxable year are exempt from reporting the cost of health coverage.
The value of coverage is reported in box 12 of the Form W-2 using code “DD” to identify the amount. In general, the amount reported should include the portion paid by the employer and paid by the employee. However, some coverage is excluded from reporting, such as amounts contributed to a Health Savings Account and any salary reduction election to a Flexible Spending Account (however, special rules apply if optional flex credits are included).

Additional information on the Form W-2 reporting requirement, including the types of coverage that must be reported and the types of coverage that are excluded, can be found in our three Briefings below.

 

Additional Information
Health Care Reform: Guidance for Form W-2 Reporting This Briefing describes the general Form W-2 reporting requirements that employers must satisfy with respect to the cost of their employer-sponsored group health coverage.
Health Care Reform: Updated W-2 Reporting Guidance This Briefing outlines certain types of coverage that are exempt from the reporting requirements and how to determine the amounts to be reported.
Health Care Reform: W-2 Health Coverage Reporting Guidance This Briefing includes a chart showing the coverage that must be reported, the coverage that is excluded and the coverage that employers may choose to include.