For 2011, the IRS has issued a draft Form W-2 for employers to report wages and employee tax withholding and will defer the new requirement for employers to report the coverage cost under an employer-sponsored group health plan.
The draft Form W-2 provides codes for employers to report the coverage cost under an employer-sponsored group health plan. The Treasury Department and the IRS have deemed this this relief necessary to provide employers with an appropriate timeframe to make adjustments to their payroll systems or procedures to comply with the new reporting requirement. Guidance will be published by the IRS regarding the new requirement later this year.
While reporting the coverage costs will be voluntary in 2011, the IRS notes that the amounts reportable are not taxable. The new reporting requirement, which was included in the Affordable Care Act, is to provide information and greater transparency of overall health care costs to employees.
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