Heath care and W-2s: not all employers report and not all contributions are reported

In conjunction with the passage of PPACA, certain employers are now required to report the "aggregate cost of applicable employer sponsored coverage" under Section 6051(a)(14) on W-2s.  There is a lot of good information in IRS Notice 2012-9 that explains this reporting requirement. Some highlights:

• In the case of the 2012 Forms W-2 (and until further guidance issued) an employer is not subject to the reporting requirement for any calendar year if the employer was required to file fewer than 250 Forms W-2 for the preceding calendar year.  So, if an employer filed fewer than 250 2011 Forms W-2 (the ones employers gave out in January of 2012), the employer would not be subject to the reporting requirement for Forms W-2 for the 2012 calendar year.  For employers with fewer than 250 w-2s, the requirement to report takes effect for the 2013 tax year (unless further delayed).

• The aggregate reportable cost generally includes both the portion of the cost paid by the employer and the portion of the cost paid by the employee, regardless of whether the employee paid for that cost through pre-tax or after-tax contributions.  So it is the total cost of the coverage. 

• Amounts contributed to a multiemployer plan are not included in the cost of coverage.  If the only applicable employer-sponsored coverage provided to an employee is provided under a multiemployer plan, then the employer is not required to report any amount under § 6051(a)(14) on the Form W-2 for that employee. 

• An employer is not required to include the cost of coverage under a dental plan or a vision plan if such plan is not integrated into a group health plan providing additional health care coverage subject to the reporting requirements of § 6051(a)(14). An employer must include the cost of coverage under a dental plan or a vision plan if such plan is integrated into a group health plan providing such additional health care coverage.

So as we get closer to the time when 2012 W-2s have to be prepared, make sure you consult with your benefit professionals to make sure if you have to report, what you have to report and how you calculate the reportable number.