Health Care Reform: Requirement to Report Value of Health Benefits
on Form W-2
The Internal Revenue Service (IRS) has deferred until 2012 the health care reform requirement that employers report the value of defined employer-sponsored health benefits on employees' W-2 forms. Originally scheduled to be effective with the 2011 tax year, the IRS announced that the employer reporting will be optional for 2011. The delay is designed to give employers and payroll vendors additional time to make the system and procedural changes needed to comply with the requirement. Additionally, more guidance from the IRS on the Form W-2 reporting requirement is expected to be released later in 2011. It is hoped that this guidance will address many of the open or unclear issues for employers, including:
¨ how to value coverage that is self-insured,
¨ how to value coverage that has a health reimbursement arrangement component,
¨ how to value on-site medical clinics,
¨ how to value retiree coverage,
¨ how to handle plans that are on a non-calendar year basis, and
¨ how retroactive enrollment changes must be handled, among others.
The Instructions for the 2011 W-2 do not include any guidance on how employers should value health benefits. Employers are directed to the Affordable Care Act Provisions Section of the IRS website where additional guidance will be posted in the future.
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We are, as always, available to you for any questions relating to this notice, or any other employee benefit issues or concerns.
Bollinger offers the above information for the education of our clients. It is not intended to be legal or actuarial advice. If such advice is required, we strongly recommend that you consult with your current professional advisor or engage a licensed professional.