Background and Effective Date
Under health care reform, employers are required to report to employees the cost of their employer-sponsored group health plan coverage. This reporting is for informational purposes only and is intended to inform employees of the cost of their health care coverage. The Internal Revenue Service (IRS) continues to stress that this new reporting requirement does not cause excludable employer provided health care coverage to become taxable.
To comply with this new requirement, employers will need to:
- Assess the applicable employer-sponsored coverage that is provided to each employee;
- Calculate the aggregate cost of such coverage for each employee; and
- Report that cost on each employee’s Form W-2, in box 12, using code DD, beginning with the W-2 issued in January 2013 (i.e., the Form W-2 issued for the 2012 calendar year).
To comply with this new requirement, employers should start gearing up to make sure systems are in place to track employee coverage and coordinate with their finance, payroll and human resources staff and vendors to ensure accurate reporting.
Please see full publication below for more information.