Question of the Month
Disregard if you have fewer than 250 W-2 employees in the last calendar year.
Q. Under the ACA, which employers must report information on Form W-2 and what information must be reported?
The Affordable Care Act requires employers to report the cost of health coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on Form W-2 does not mean that the coverage is taxable.
Employers that provide "applicable employer-sponsored coverage" under a group health plan are subject to the reporting requirement. This includes businesses, tax-exempt organizations, and federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families). Federally recognized Indian tribal governments are not subject to this requirement. Reporting is optional for employers that file less than 250 W-2's in the previous tax year.
Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of Form W-2, with Code DD to identify the amount. There is no reporting on Form W-3 of the total of these amounts for all the employer's employees.
In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee.