THE PATIENT PROTECTION AND AFFORDABLE CARE ACT & the new W-2 Reporting Requirements
This title doesn’t sound like it has anything to do with an employers’ W-2’s, but it does. A provision in the Act now affects any employers who sponsor health care plans.
“Increasing Transparency in Employer W-2 Reporting of Value of Health Benefits: This provision requires employers to disclose the value of the benefit provided by the employer for each employee‟s health insurance coverage on the employee‟s annual Form W-2.” (quoted from PPACA Detailed Summary)
Employers must now realize that they need to become aware of and adjust to the new reporting requirements that will take effect in 2013. However, because employees can ask for their W-2’s early, for instance, if they terminate employment during the calendar year, employers will need to have their payroll systems adjusted to be able to report this in early 2012. While the IRS had originally slated this to be effective for 2011, they have since changed this and made reporting of the health insurance value information optional for 2011. Since employers have only 30 days to respond to the W-2 request, it is in the employer’s best interest to prepare for this new provision immediately.
A detailed summary of the Patient Protection and Affordable Care Act (PPACA) is available online at http://dpc.senate.gov/healthreformbill/healthbill04.pdf . As you can see in this 14 page summary, the Act covers everything from Americans having affordable health care to revenue provisions. As there may be future regulations to help employers clarify the different types of coverage, such as how to report for less than a month’s coverage, if coverage starts or stops in the middle of the month; or how it applies to former employees who are provided health care coverage, including retirees, COBRA participants or even surviving spouses; it is important to work with your accounting department, payroll company and health insurance providers to stay abreast of the ever changing regulations surrounding healthcare reform.
This article courtesy of Pomaybo, Inc., providing solutions to workforce issues. Please visit www.pomaybo.com for more information.
