New Guidance Related to Form W-2 Reporting Requirements


The Patient Protection and Affordable Care Act (Affordable Care Act or ACA) places various new reporting and disclosure requirements on employers, group health plans, and plan administrators. One such ACA requirement relates to reporting the cost of employer-sponsored health coverage on the Form W-2, Wage and Tax Statement. Employers have been uncertain regarding many aspects of the statute, such as whether all employers must comply, what types of plans must be considered, and how much flexibility employers have in calculating the cost of health coverage.

Recently, the Internal Revenue Service (IRS) issued Notice 2011-28 (the Notice), which provides needed guidance on the new Form W-2 reporting requirements. This guidance generally is applicable to calendar year 2012 Forms W-2 (which will be issued in January 2013), although employers may voluntarily report coverage for calendar year 2011 using the guidance. This LawFlash describes the relevant provisions of the ACA and the Notice, and also discusses the impact of the new rules on employers.

General Requirements

The ACA added section 6051(a)(14) to the Internal Revenue Code (Code), and generally requires annual reporting to employees of the “aggregate cost” of “applicable employer-sponsored coverage.” As with other forms of remuneration that must be reported to employees under Code section 6051(a), employers meet this new requirement by using the Form W-2. The Form W-2 for each calendar year is due on or before January 31 of the succeeding year (or, within 30 days after a terminated employee requests a Form W-2). The ACA originally required the reporting of applicable employer-sponsored coverage starting in 2011, but this effective date was extended under Notice 2010-69 to calendar year 2012. The Notice maintains the calendar year 2012 effective date.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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