New to HR? Templates, tools and development to make you a seasoned pro in no time.
Shawn Premer shows how doing the right thing for employees leads to positive business results.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Reporting is voluntary for all employers for 2011 and small employers for 2012
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
The U.S. Internal Revenue Service (IRS) issued
Notice 2011-28 on March 29, 2011—interim guidance to employers regarding informational reporting on each employee's annual Form W-2 of the cost of the health insurance coverage they sponsor for employees.
The IRS emphasized that this new reporting to employees is for their information only, to inform them of the cost of their health coverage, and does not cause excludable employer-provided health coverage to become taxable. Employer-provided health coverage continues to be excludable from an employee's income and is not taxable.
The Patient Protection and Affordable Care Act (PPACA), enacted in March 2010, provides that employers are required to report the cost of employer-provided health care coverage on the Form W-2.
Notice 2010-69, issued in October 2010, made this requirement optional for employers for the 2011
Form W-2 (generally furnished to employees in January 2012).
Relief for Small Employers
In its new guidance, the IRS provided further relief for small employers (those filing fewer than 250 W-2 forms) by making this requirement optional for them at least in tax year 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013) and to continuing this optional treatment for smaller employers until further guidance is issued.
Using a question-and-answer format, Notice 2011-28 provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose voluntarily to comply with it for 2011 or 2012. The notice includes information on how to report, what coverage to include and how to determine the cost of the coverage.
The IRS is requesting comments on this interim guidance by June 27, 2011.
W-2 Reporting Is a Benefits Communications Opportunity
"Use health care reform as an opportunity to better inform employees about their health and wellness benefits," recommended Jennifer Benz, CEO of Benz Communications.
"The intent of requiring the value of employer-provided health care to be reported on employees' W-2 statements is to help people understand the true cost of coverage," she explained. "Many companies have not communicated this information before, and their employees are going to have sticker shock when they see how much the cost of their health care really is. But this should be used as an opportunity to talk about why health care is so expensive"—raising issues such as unnecessary overutilization of low-value services—"and the investment that the company is making in employee benefits."
It's also a chance to address some of the myths that surround the W-2 reporting requirement. "There are a lot of Internet rumors that say W-2 cost reporting means health coverage will now be taxed, which is not true," Benz noted. "So while W-2 reporting is an opportunity to communicate with employees about the value of their health care benefits, "employers are going to have a lot of rumors to dispel at the same time."
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Talent Attraction Study: What Matters to the Modern Candidate
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies