Recently, the IRS released Notice 2011-28, which provides guidelines for employer reporting of group health insurance costs on employees' Form W-2.
Section 9002 of the Patient Protection and Affordable Care Act (PPACA) added Section 6051(a)(14), which requires the reporting for Forms W-2 issued for the 2012 calendar year.
Section 6051(a)(14) applies to the following:
- Employers with 250 or more W-2 employees
- Employers with self-funded insurance plans subject to COBRA.
Employer group health insurance expenses do not become taxable under the requirement. Contributions made to Health Reimbursement Arrangements (HRAs) are not required to be reported under Section 6051(a)(14):
"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."