On October 12, 2010, the Internal Revenue Service (IRS) issued Notice 2010-69, which provides that the W-2 reporting of the cost of employees’ health coverage will be voluntary, rather than mandatory, for 2011. Without the relief granted in the notice, the Patient Protection and Affordable Care Act would have required employers to report the aggregate cost of health coverage on employees’ W-2 forms for 2011.

Although the IRS still expects to issue guidance on the reporting requirements before the end of this year, it recognized that employers may need additional time to modify employers’ payroll systems to comply with the new reporting requirement. As a result of the relief provided in this notice, employers will not face a penalty if they do not report the cost of employer-provided health coverage on employees’ W-2s for 2011.