September 22, 2020

Volume X, Number 266

September 22, 2020

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September 21, 2020

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The New Health Care Law W-2 Reporting

Health Care Coverage Reporting Requirements

Now that the Supreme Court has ruled and upheld the Patient Protection and Affordable Care Act (otherwise known as the New Health Care Law), employers will need to start focusing in earnest on the Act’s requirements. Some parts of the Act have gone into effect already, but most of the major provisions of the Act have not yet started, with the biggest changes commencing in 2014.

One of the Act’s requirements that is going into effect beginning in January 2013 is the requirement that employers must report the value of employees’ health benefits on their W-2 forms. This requirement was optional for 2011. The amount reported should include both the portion paid by the employer and the portion paid by the employee. According to the IRS, this reporting of the cost of an employee’s health care benefits will not cause this amount to become taxable income. Instead, it is designed to provide employees with useful and comparable information about the cost of health care coverage.

All employers who are subject to the Act (employers with 50 or more full-time employees) will have to comply with this requirement eventually, but compliance with this provision has been dived into two phases. Large employers (those who file 250 or more W-2 forms) must comply with the provision for tax year 2012 W-2 forms, which should be filed in January 2013. (Reporting is optional for small employers for tax year 2013.) All employers, thus including small employers, must comply with this provision for tax year 2013 W-2 forms, which would be filed in January 2014.

This will be one of a series of changes that the New Health Care Law will bring about for employers, and the Act’s impact on employers will continue to grow as additional provisions take effect.

©2020 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume II, Number 226


About this Author

Eric Sigda, Greenberg Traurig Law Firm, New York, Labor and Employment Law Attorney

Eric B. Sigda is a shareholder in Greenberg Traurig’s Labor & Employment Practice. He represents management in litigating federal and state employment matters including claims involving allegations of discrimination, harassment, whistleblowing, Sarbanes-Oxley retaliation, breach of contract, wage and hour class actions, misappropriation of trade secrets and violations of restrictive covenants. Eric has handled matters in federal and state courts and in arbitration. He has also represented clients before various agencies including the Equal Employment Opportunity...