2012 Mandatory Health Care Reporting for Employers with 250 or more W-2s

March 16, 2012
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Starting in 2012, W-2 reporting of the aggregate cost of coverage under an employer-sponsored group (or self-insured) health plan is mandatory for employers that filed 250 or more W-2s in the previous year (2011).  The aggregate cost of coverage is reported in Box 12 of the Form W-2, labeled with code “DD.”  The amount reported is for informational purposes only and not included in the employee’s taxable income.
The aggregate cost is the total cost of coverage under the group health plan provided to the employee.  The total cost includes both the portion paid by the employer and the portion paid by the employee, regardless of whether the employee paid the cost through pre-tax or after-tax contributions.
The types of health insurance coverage that must be reported on Form W-2 include the aggregate cost of major medical insurance, health FSA value in excess of the employee’s cafeteria plan salary reductions for all qualified benefits, cost of hospital indemnity insurance paid through salary reduction (pre-tax) or by the employer, and domestic partner health insurance coverage included in the employee’s gross income.
It is optional for the employer to include the aggregate cost of any dental and vision plan insurance, if it is a separate plan and not integrated with the medical or health insurance plan.  The cost is included in Box 12, coded “DD,” if it is integrated with the employer’s health insurance plan.
The amount of health insurance premiums for a 2% shareholder-employee that is included in their taxable income is not included in Box 12, Code DD.
The IRS has issued a chart that may give further guidance as to what should be included on Form W‑2. Click here.
If you have any questions or would like to discuss the information above, we encourage you to contact your Wipfli relationship executive.

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