IRS clears up W-2 health cost reporting rules

January 6, 2012 by Christian Schappel

The latest round of IRS guidance helps answer questions employers have raised about the requirement to report the cost of workers’ health insurance on W-2s.

The healthcare reform law mandates that employers that issue more than 250 W-2 forms for tax year 2012 must include on those statements the cost of employees’ healthcare coverage. 

Employers issuing fewer than 250 W-2s are exempt from this rule until it comes time to pass out 2013 W-2s — and possibly longer.

Points of clarification in the latest guidance:

• Employers can — but aren’t required to — report contributions made to health reimbursement arrangements
• The cost of services provided through employee assistance programs (EAP), wellness programs or on-site medical clinics is not required to be reported — unless the employer charges premiums for those services to COBRA beneficiaries

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