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New W2 Health Benefit Reporting Requirements for Employers

June 24th, 2011 – Small businesses with fewer than 250 W2 employees will need to start reporting the value of health coverage benefits on W2 forms in 2013. Employers with 250+ W2 employees will have to start reporting these benefits on W2 forms in 2012. However, this change in reporting does NOT mean that the benefits are taxable to employees.

Benefits exempt from reporting requirements include: Standalone dental and vision coverage, Employee contributions to health care flexible spending accounts and health savings accounts, Accident insurance, Disability insurance, Long-term care insurance, and Workers’ compensation insurance.

For more guidance on the actual calculations for the benefits reported see IRS Notice 2011-28.

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