2012 Form W-2 Reporting of the Value of Health Benefits Provided
Frost Brown Todd Fact Sheet
September 1, 2011 By Employee Benefits Group
- The IRS recently issued Notice 2011-28 addressing employers' new Form W-2 reporting requirement for health coverage.
- Reporting will be required on Form W-2s issued for the 2012 year (generally issued in January 2013).
- The full value of employee major medical coverage must be reported on the Form W-2 in Box 12 using the code “DD”
- The amount to be reported is the entire cost of the coverage under a major medical group health plan, without regard to
- whether the plan is insured or self‐insured
- the portion paid by the employee
- any imputed income to the employee
- the scope of the coverage
- This "entire cost" is determined as follows:
- For insured plans, the premium charged by the insurer should be reported as the cost of coverage.
- For self-insured plans, the COBRA rates should be used (without the 2% administrative charge).
- The employer must track the months the employee was enrolled and report only the aggregate cost for those months.
- Certain benefits are not to be reported, including:
- Dental or vision insurance under a separate policy
- Coverage under an FSA, HSA or HRA
- Small Employer Exception: Until future guidance is issued, reporting is optional for employers that filed fewer than 250 Forms W-2 for the prior year.
- The cost of coverage must be reported on a calendar year basis, even if the policy or plan year is not the calendar year.