Last year's U.S. health care reform legislation included a provision requiring employers to disclose the costs of health care coverage on the employee's W-2 form at the end of the year. While this requirement is intended to test the idea that employees would be more careful in using health care benefits if they knew how much it cost their employer to provide the coverage, Internet rumors have spun this story "out of control," says the Small Business Legislative Council (SBLC). The facts, according to the SBLC:
Last year's U.S. health care reform legislation included a provision requiring employers to disclose the costs of health care coverage on the employee's W-2 form at the end of the year. While this requirement is intended to test the idea that employees would be more careful in using health care benefits if they knew how much it cost their employer to provide the coverage, Internet rumors have spun this story "out of control," says the Small Business Legislative Council (SBLC). The facts, according to the SBLC:
• This disclosure appears on the W-2 but has no taxable consequences.
• The information must appear on W-2s for 2012 wages (the W-2s provided starting in January 2013).
• Employers who issue fewer than 250 W-2s have an extra year to comply with the requirement.
• Employers may voluntarily disclose them on 2011 W-2s.
• Notice 2011-28 details what costs need to be included on the W-2. This notice can be downloaded at www.irs.gov/pub/irs-drop/n-11-28.pdf.
• Employers who fail to include this information by the deadlines are subject to the existing penalties for failing to file a correct W-2.
