As part of the Affordable Care Act (ACA), employers are required to report the cost of health benefits coverage under an employer-sponsored group health plan.
Last week, the IRS issued a notice confirming that employers are not required to include the cost of coverage under a Health Reimbursement Arrangement (HRA) on employee W-2s. If the only coverage provided to an employee is an HRA, the employer is not required to report any amount on the Form W-2 for that employee.
According to Notice 2012-9, the IRS is granting permanent relief to employers that sponsor HRAs:
"Q-18: Is the cost of coverage under a Health Reimbursement Arrangement (HRA) required to be included in the aggregate reportable cost reported on Form W-2?
A-18: No. An employer is not required to include the cost of coverage under an HRA in determining the aggregate reportable cost. If the only applicable employer-sponsored coverage provided to an employee is an HRA, the employer is not required to report any amount under §6051(a)(14) on the Form W-2 for that employee."
Click here to read the full notice.
