Health Care Reform W-2 Guidance from IRS

May 13, 2011

The IRS finally issued long-awaited guidance (Notice 2011-28) regarding new Form W-2 requirements under health care reform that require employers to report the cost of coverage under an employer-sponsored group health plan. Highlights of the guidance are as follows:

Effective Date and Purpose

The guidance generally applies beginning with 2012 Forms W-2 that employers must provide to employees in January 2013. Forms W-2 provided to employees terminating during 2012 and requesting a Form W-2 prior to the end of the calendar year need not comply with the new requirements. This exception also applies to future years, until further IRS guidance is issued.

Employer-provided health coverage will remain non-taxable to employees (except for special situations, such as domestic partner or other non-dependent imputed income).

The purpose of the new W-2 information is to provide employees information on the cost of their health care coverage.

There are exceptions for certain tribal governments, churches and small employers (required to file fewer than 250 Forms W-2). Multiemployer plans are exempt from the reporting requirement until further guidance.

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