The Affordable Care Act (ACA) requires employers to report the cost of coverage under an employer-sponsored group health plan via the Form W-2. Employers might find the IRS informational guidance (available here) and IRS Frequently Asked Questions and Answers (available here) helpful for a brief overview of the requirements. Employers should note that the IRS has stressed that the W-2 reporting requirement is informational only and will not affect the amount includible in income or the amount reported in any other box on Form W-2. The stated purpose is to provide “useful and comparable consumer information to employees on the cost of their health care coverage.” (See Internal Revenue Bulletin No. 2012-4, Jan. 23, 2012.)
W-2 Report Box 12
The reported value of the cost of the health care coverage will be reported in Box 12 on the
W-2 Form, using Code DD, and is not taxable for the employee. This requirement is mandatory for the 2018 calendar year for employers who issue 250 or more W-2 Forms. Employers who issue fewer than 250 W-2’s may choose to include this information as well, but they are not subject to the requirement.
W-2 Report Available on Employer Portal
MedCost Benefit Services is prepared to assist you with this reporting by providing you with a W-2 report via the employer portal on the MedCost website. This report lists each employee who was covered under your health plan during the 2018 calendar year, along with an amount that represents the cost of their health care coverage. This amount has been calculated using the allocation rate for the applicable plan option and tier of coverage (for questions about rates, please contact your MedCost Benefit Services Account Manager).
This report reflects:
- new hires who may have been on the plan for only a portion of the year;
- changes that may have occurred during the year, such as a change from one plan option to another, or a change from one tier to another; and
- former employees who remained on your plan as COBRA participants or retirees.
Timing: The report will be available on the MedCost Employer Portal the week of
January 14, 2019, in a folder called “W2 Reporting.”
Please note, the W-2 report provides data only for the plans we administer for you. You are responsible for ensuring that benefit plans not administered by MedCost Benefit Services, but impacted by this ACA provision, are included appropriately in the aggregate cost reported to employees.
MedCost is here to assist you in any way we can with ACA reporting requirements. If you have questions or need additional information, please contact your MedCost Benefit Services Account Manager or the Compliance Department.
Michael Berwanger, 336-774-4359, email@example.com
Megan Westbrook, 336-774-4307, firstname.lastname@example.org