Recently, the Internal Revenue Service (“IRS”) issued Notice 2012-9 (the “Notice”), which restates and amends the interim guidance on reporting the cost of employer-sponsored group health insurance coverage on an employee’s Form W-2 in 2012. In response to comments received, this Notice supersedes previous guidance (Notice 2011-28) to clarify certain aspects of the reporting requirements and to provide additional guidance through several new Q&A’s.
The Notice provides guidance for those employers who are required to report the cost of employer-sponsored health insurance coverage beginning with the 2012 Forms W-2 (calendar year W-2’s issued in 2013) and for those employers who voluntarily choose the report the coverage on 2011 Forms W-2, even though the reporting is not required. With regard to the Forms W-2 for 2012, unless and until further guidance is issued, an employer is not subject to the reporting requirement for any calendar year if the employer filed fewer than 250 Forms W-2 in the preceding calendar year.
In providing additional guidance, among other points, the Notice: (1) provides that employers are not required to include the cost of coverage under an employee assistance program, wellness program or on-site medical clinic if the employer does not charge a premium with respect to that type of coverage provided under a COBRA qualifying beneficiary, (2) clarifies that employers may include the cost of coverage under programs not required to be included (such as a health reimbursement arrangement), (3) clarifies how to calculate the reportable amount for coverage if only a portion constitute coverage under a group health plan, and (4) clarifies how to calculate the reportable amount if an employer is provided notice after December 31 of a calendar year of events that occurred on or before December 31 of a calendar year that affect the prior year’s coverage (divorce, change of family status).
Enacted as part of the Patient Protection and Affordable Care Act (“PPACA”), the need to report the cost employer-sponsored coverage on an employee’s Form W-2 is simply intended to provide employees with useful information in order to compare the cost of coverage. The obligation to disclose this information on an employee’s Form W-2 does not cause otherwise excludable employer-provided health insurance coverage to become taxable; the reporting is for informational purposes only. Should you have any questions on this Notice or its requirements, please contact your relationship attorney.of