The Patient Protection and Affordable Care Act requires employers to report the aggregate cost of employer-sponsored group health coverage on each employee’s Form W-2. The IRS recently announced that it will delay the compliance date for this requirement.
Previously, employers would have had to comply with this reporting requirement for the 2011 Form W-2s (which are issued in 2012). Now, the effective date has been delayed one year, so that employers need to include this information for the first time on the 2012 W-2s (which are issued in 2013).
The IRS and Treasury Department also announced that they are anticipating issuing additional guidance about this requirement before the end of 2010.
Employers should use this additional time to ensure that they (or their payroll provider) are prepared to gather the necessary information in advance of having to comply with this requirement. They must be able to identify the applicable employer-sponsored coverage that was provided to each employee, and calculate the aggregate cost of that coverage.
Employees may have questions about this new reporting procedure, regarding whether their health benefits are now taxable. You can assure your employees that this rule applies to reporting only, and does not mean they will incur any additional tax obligations.
Source: The Ward Agency
