Further Guidance on W-2 Reporting Requirements Released On Jan 3

Note: This reform alert is an update of a previously published alert, W-2 reporting requirements expanded for some employers.

The Internal Revenue Service (IRS) has issued additional guidance modifying previous requirements under the Affordable Care Act (ACA) for informational reporting, asking employers to provide employees with their cost of employer sponsored health care on W-2 forms.

This modified requirement applies to federal, state, and local governmental agencies, but it does not apply to federally recognized Indian tribal governments. Until further direction is provided, the W-2 reporting requirement will not apply to tribally chartered corporations owned by federally recognized Indian tribal governments.

Employers are not required to include the cost of health coverage under an employee assistance program, wellness program, or on-site medical clinic if the employer does not charge a premium for COBRA coverage for a qualifying beneficiary.

An employer can still voluntarily choose to include the coverage cost on W-2 forms for an employee assistance program, wellness program, on-site medical clinic, or the cost of coverage under a health reimbursement arrangement.

If an employer reported on certain excepted benefits on a pre-tax basis under a cafeteria plan, which may include disease- or illness-specific coverage and indemnity insurance coverage, then the employer must include this in the W-2 reporting.