The Affordable Care Act (ACA) added Internal Revenue Code (Code) section 6051(a)(14), which requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees' Forms W-2. This reporting requirement was originally effective for the 2011 tax year. However, the IRS later made reporting optional for 2011.

In April 2011, the IRS issued Notice 2011-28, which furthered delayed the Form W-2 reporting requirement for small employers and provided interim guidance on the reporting requirement. On Jan. 3, 2012, the IRS issued Notice 2012-9, which revised and clarified the IRS's interim guidance on the Form W-2 reporting requirement.

The Form W-2 reporting requirement is optional for small employers (those that file fewer than 250 Forms W-2) for 2012 and for future years, unless and until the IRS issues further guidance. Large employers must comply with the reporting requirement starting in 2012 (for the Forms W-2 that must be provided by the end of January 2013).

The IRS's interim guidance is written in question-and-answer (Q&A) format and provides information on a variety of issues related to the Form W-2 reporting requirement. Employers and payroll providers may find the information helpful when updating their systems to comply with the new reporting requirements. The interim guidance is generally applicable beginning with the 2012 Forms W-2. Employers that voluntarily report the cost of coverage on the 2011 Forms W-2 may also rely on the interim guidance.

This MacCorkle Insurance Service Legislative Brief contains the Q&A interim guidance as provided by the IRS in Notice 2012-9.

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