April 18, 2011
Guidance on Informational Reporting of Employer-Sponsored Health Coverage Voluntary for All Employers for 2011 and Small Employers for 2012
By Margaret Kolakowski, Supervisor, Tax & Business
On Tuesday March 29, 2011, the Internal Revenue Service released Notice 2011-28, providing interim guidance to employers on how to report the cost of health insurance coverage they sponsor to employees on their employee’s annual W-2 forms. This new reporting on W-2s is simply to inform employees of the cost of their health insurance coverage.
Last fall the IRS issued Notice 2010-69, which made the requirement for providing cost of health coverage optional for employers on their employee’s 2011 W-2s. With the new guidance issued, the IRS gave further relief to small businesses that file fewer than 250 W-2s. The requirement will be optional for those small businesses for 2012 and continuing into further years until a new guidance is issued. Employers that issue 250 or more W-2’s are required to begin reporting the health coverage with 2012 W-2s.
Notice 2011-28 also provides Q&A’s to those employers who voluntarily comply for 2011 and for those who are required to comply in 2012 under the requirement. The notice gives clarification on issues such as reporting requirement for retirees receiving health care coverage, method of reporting, and further defines “applicable employer-sponsored coverage.”