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Affordable Care Act Changes

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Under the Affordable Care Act, there are new reporting requirements for the employer to report the cost of coverage under an employer-sponsored group health plan. For years after 2011, employers generally are required to report the cost of health benefits provided on the Form W-2. All employers that provide "applicable employer-sponsored coverage" under a group health plan are subject to the reporting requirement.

The IRS Notices 2011-28 and 2012-9 provide transitional relief from the reporting requirements for the following:

  • Small employers(employers filing fewer than 250 Forms W-2 for the previous calendar year);
  • Self-insured plans of employers not subject to COBRA continuation coverage or similar requirements
  • Multiemployer plans;
  • HRAs;
  • Stand-alone dental and vision plans;
  • Employers furnishing W-2s to employees who terminate before the end of the calendar year and request a W-2 before the end of that calendar year

In the above situations, the new Form W-2 reporting requirements will not apply until the IRS publishes guidance giving at least six months advance notice of any change to the transition relief. The new Form W-2 reporting requirement is effective for taxable years beginning after 2012(the2012 W-2 due in January 2013).

If your business does not qualify for one of the exceptions above, then you must comply with the new W-2 reporting requirements. I have attached a chart from the IRS website which reviews the reporting requirements for Box 12, Code DD, and has no impact on the requirements to report these items elsewhere. For example; while contributions to Health Savings Arrangements (HSA) are not to be reported in Box 12, Code DD, certain HSA contributions are reported in Box 12, Code W.

Please contact our office if you wish to discuss how the new reporting requirements effect you individually. We will be happy to answer any question you might have.

Accountant