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Reminder to Employers: Forms W-2 Must Include Cost of Group Health Coverage

We encourage all clients to login to CBGconnect to download our ACA Legislative Brief on the topic of the Form W-2 Reporting Requirements regarding the cost of group health coverage --- via CBG BenefitsUnder the Affordable Care Act, employers are required to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2.

The Form W-2 reporting requirement is currently optional for small employers. In the case of this requirement, an employer is considered a small employer if it had to file fewer than 250 Forms W-2 for the prior calendar year. Thus, large employers  — those that file 250 or more Forms W-2 — are required to comply with these reporting requirements.

Here are a few steps that employers should take regarding this requirement:

  • Identify where they fall regarding the 250 figure that defines large employer status with respects to this law
  • Make sure that they can identify the applicable employer-sponsored coverage that is provided to each employee and calculate the aggregate cost of that coverage
  • Ensure that the appropriate amount is added to the Form W-2, which must be furnished to employees by February 1, 2016
  • Be prepared to address questions from employees regarding whether their health benefits are taxable under this reporting requirement

In addition, we encourage all clients to log-in to the CBGconnect portal to download the Health Care Reform Legislative Brief entitled “Form W-2 Reporting Requirements

That document provides additional details on topics such as:

  • What coverage must be reported on the W-2
  • How do medical savings accounts impact the calculation of the cost of coverage
  • How should employers handle coverage that is provided after termination of employment
  • Options in the case where a coverage period spans multiple calendar years

If you have any trouble accessing this document within the CBGconnect portal, please contact our team at 781-759-1222.

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Posted in: Benefits and Insurance, Human Resources, Legislation

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