On January 3, 2012 the Internal Revenue Service issued interim guidance, Notice 2012-9, an amendment of Notice 2011-28, discussing the PPACA requirement of employers to include the cost of employer-sponsored health insurance coverage on each employee’s annual W-2 Form. Notice 2011-28, issued last March, had postponed this requirement until tax year 2012 and made it optional for all employers for the 2011 W-2 Forms.
The IRS issued a release yesterday announcing they will “defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.”
Health Reform is adding reporting requirements for employers on Form W-2s with Section 9002 of the PPACA. Beginning in 2011, employers will be required to include the aggregate cost of employer-sponsored health insurance coverage on every employee’s W-2 form. The cost will not be included in the employee’s taxable income. Rather, the intent of the W-2 reporting is to track benefit values for the 40% excise tax on Cadillac plans beginning in 2018.