December 5, 2018

W-2 Reporting Deadline

Reminder: Deadline Approaching for W-2 Reporting

Under the Affordable Care Act (ACA), employers are required to report on form W-2 the aggregate cost (employer plus employee portion) of employer sponsored health benefits. Employers that issued 250 or more W-2s must comply with the reporting requirement for W-2s issued. Smaller employers, defined in the guidance as employers that issue fewer than 250 W-2s, are exempt from this reporting requirement until the government issues further guidance.

This reporting is for employee information only, to inform them of the cost of their health coverage and does not cause excludable employer provided coverage to become taxable. In addition a W-2 is not required to be issued to retirees who receive healthcare but no longer receive wages or salary or an individual who would not otherwise receive a W-2. The health care cost will be reported in Box 12 using Code DD of the form W-2.

Employer provided HSA and HRA contributions are not required to be reported on form  W-2. However, with regard to Flexible Spending Accounts, if the employer contributes to the account in addition to the participant’s election to the account, then the amount of the employer contribution must be reported on form W-2.

With respect to dental and vision coverage, if the coverage is a separate premium and election from the medical plan, the cost is not required to be reported on form W-2. If the coverage is core and an integrated part of the medical plan then the cost is required to be reported. With regard to on-site medical clinics, employee assistance programs and wellness programs, the employer does not have to include these in the cost of coverage if the employer does not charge a premium with respect to that coverage under COBRA.

Although other methods are provided in the guidance, generally in determining the reportable cost of coverage (aggregate cost) the employer may use the COBRA applicable premium method (less the 2% administrative charge).

Unified is assisting our clients in meeting the W-2 reporting requirement. We have two options available:

Option 1: Unified will prepare an eligibility file detailing which employees were active on the plan during 2018 and their choice of coverage.

Option 2:  Unified will prepare an eligibility file detailing the same information as above, however, including single entries for each employee that details the amount that should be reported on the W-2 for each employee with enrollment during 2018.

Please notify your account executive if you would like Unified to assist you with this requirement.

This information is provided by Unified Group Services, Inc. for informational purposes only and is not to be construed as legal advice.