IRS provides interim guidance on W-2 insurance coverage reporting

On March 29, 2011 the IRS issued Notice 2011-28 which provides interim guidance on information reporting to employees on their annual Form W-2 of the cost of employer-sponsored group health insurance coverage. This reporting is mandatory on the 2012 annual Form W-2 for all employers with 250 or more employees. For those employers with 250 or fewer employees the requirement is mandatory on the 2013 annual Form W-2.

The interim guidance includes the following:

* The aggregate costs of employer sponsored group health insurance coverage will be reported in Box 12 of the annual form W-2 with code DD.
* The reporting required includes both the employee and employer paid premiums. This also includes any amounts added to an employee’s income for tax purposes.
* The reporting includes vision and dental coverage if these items are integrated into the employer's group health plan.
* The reporting is informational only and does not affect whether any particular coverage is excludable from gross income.
* There is no form W-3 reporting.
* Amounts contributed to an Archer MSA, Health Savings Account, and the amount of any salary reduction election to a flexible spending arrangement are not reported.
* Employers may calculate the reportable cost under a plan using the COBRA applicable premium method or the premium charged method.

Paycor will use the information provided by the IRS to continue our development efforts for reporting the cost of the employer- sponsored group health plan coverage to comply with all mandated reporting requirements.

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