PPACA: Reporting Employer Healthcare Costs

Under the Patient Protection and Affordable Care Act, in 2013 employers must begin reporting “aggregate costs” they pay for employee health coverage on the individual W-2 Forms of those employees. Morgan Lewis’ comprehensive overview of recently issued Internal Revenue Service guidance on the reporting requirement provides a useful resource for employers:

“The Affordable Care Act generally requires annual reporting to employees of the ‘aggregate cost’ of ‘applicable employer-sponsored coverage’… Such coverage is reported on Form W-2, Wage and Tax Statement, and is first required for the 2012 calendar year (for which Forms W-2 must be distributed by the end of January 2013), although employers may voluntarily report such coverage for the 2011 calendar year.“… Aggregate cost is determined according to the general rules used to determine the applicable premium for COBRA continuation coverage. It includes amounts paid by the employer and the employee, regardless of whether these amounts are paid through pre-tax or post-tax contributions.”

Read the full update, Updated Guidance on Form W-2 Reporting of Healthcare Coverage, from Morgan Lewis»