You may have new reporting responsibilities in January 2013
Employers sponsoring group coverage will have new reporting responsibilities according to the Affordable Care Act (ACA) and the Internal Revenue Service (IRS). You may need to report costs associated with employer-sponsored health coverage on IRS Form W2.
Who has to comply with this report?
Some employers are exempt from these reporting requirements1:
You should always consult with your tax advisor to see if this rule applies to you.
What's the purpose of the W-2 reporting?
The table below outlines the required, optional and excluded costs that employers may include. But before doing so, you should consult with your tax advisor.
2Federal tax laws do not recognize domestic partners or same-sex marriages. As a result, the value of benefits extended to domestic partners and same-sex spouses will be taxable under federal law unless the domestic partner or same-sex spouse otherwise qualifies as the employee's dependent under federal law.
This information is provided by the IRS' Information Reporting Program Advisory Committee (IRPAC). IRPAC's members are representatives of industries responsible for providing information returns, such as Form W2, to the IRS. IRPAC works with the IRS to improve the information reporting process.
We highly recommend that you consult with your tax advisor to learn more about how the Form W2 reporting affects you.
The above description about tax rules is general in nature. Please consult your tax advisor about how these rules impact you. This information is not intended to be used for purpose of avoiding penalties that may be imposed by federal or state taxing authorities.
1 Refer to IRS Notice 2011-28, question 21, and IRS Notice 2012-9
Source: PPACA Subtitle F, Part I, Sec. 1502: Amends IRS Code of 1986 by adding subpart D after subpart C in subchapter A of Chapter 61. Detailed in IRS Notice 2011-28
Wellmark is not providing any legal advice with regard to compliance with the requirements of the Affordable Care Act (ACA) or the Mental Health Parity Addiction Equity Act (MHPAEA). Regulations and guidance on specific provisions of the ACA and MHPAEA have been and will continue to be provided by the U.S. Department of Health and Human Services (HHS) and/or other agencies. The information provided reflects Wellmark's understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan's rating period based on guidance and regulations issued by HHS or other agencies. Wellmark makes no representation as to the impact of plan changes on a plan's grandfathered status or interpretation or implementation of any other provisions of ACA. Any questions about Wellmark's approach to the ACA of MHPAEA may be referred to your Wellmark account representative. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administered Funding Arrangement does not include the employer's contribution to health insurance premiums or rates.