New Reporting Requirement of Health Care Costs on Form W-2


By Eytan Rosenthal

As part of the trend of increasing disclosure and transparency, The Patient Protection and Affordable Care Act of 2010 (PPACA) included a new reporting requirement for employers. This new law required employers to include the cost of health care coverage under an employer-sponsored health insurance plan on the 2011 Form W-2 provided to employees.

Originally, the requirement to report health care coverage costs on Form W-2 was effective for 2011 and applied to all employers. The Internal Revenue Service (IRS) issued guidance in October of 2010 delaying this requirement, stating that the reporting requirement would be optional for Forms W-2 for the 2011 tax year (to be issued in January of 2012) and reporting would become mandatory for 2012 Forms W-2 and for all future years.

On March 29, 2011, the IRS again postponed the mandatory reporting requirement. For the tax year 2012, reporting is optional for small employers and mandatory for larger employers. This new guidance makes reporting optional for the 2012 tax year relative to employer-sponsored health coverage cost on the Forms W-2, for employers who file fewer than 250 Forms W-2 in 2011. Employers filing more than 250 Forms W-2 for the 2011 tax year are required to report the cost of health care coverage provided starting in 2012 (to be furnished in January of 2013).

Employers can assure their employees that the employer-sponsored health care coverage remains nontaxable and the reporting requirements are for informational purposes only. Employers can take advantage of this delayed reporting to ensure that the necessary processes and procedures are in place to gather the required information prior to the mandatory compliance deadline.

Interested in receiving more timely articles like this one with topics that are relevant to your businessSign up for our weekly newsletters here. 



Schneider Downs provides accountingtax, wealth management, technology and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH. 

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.