Form W-2s must report value of employer-sponsored health insurance

Form W-2s must report value of employer-sponsored health insurance

Bulletin Type: 
Health Care Reform

Requirement only affects employers who issued more than 250 Form W-2s in 2013

This bulletin serves as a reminder of the employer Form W-2 reporting requirement under the Affordable Care Act.

Those not required to comply with the reporting requirement for 2014 include: 

  •  Employers with fewer than 250 Form W-2s in 2013
  •  Plans that provide coverage for military members and their families, and recognized Indian tribal governments
  •  Self-insured plans of employers not subject to COBRA continuation coverage or similar requirements
  •  Multiemployer plans

The value of health insurance premiums for 2014 must be reported in Box 12 (Code DD) of Form W-2 issued by January 31, 2015.

IRS guidance clarified that the “aggregate cost of applicable coverage” is essentially the value of an employee’s group health insurance premium paid to the insurance company, or the self-insured COBRA rate charged by the employer, minus any administrative fee.

Excepted benefits that are not subject to the reporting requirement include: 

  • Dental and vision coverage, if such plans are not integrated into a group health plan
  • Accident or disability income insurance, or any combination thereof
  • Coverage issued as a supplement to liability insurance
  • Liability insurance, including general liability insurance and automobile liability insurance
  • Workers’ compensation or similar insurance
  • Long-term care insurance
  • Automobile medical payment insurance
  • Credit-only insurance
  • Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits
  • Amounts contributed to a Health Reimbursement Arrangement
  • Amounts contributed to an Archer MSA
  • Amounts contributed to a Health Savings Account
  • Onsite medical clinics offering minimal care
  • The amount of any salary reduction election to a Flexible Spending Account

If you have questions, please contact your Bukaty Companies benefits consultant.