January 2013 > Be a Wise Healthcare Consumer

Be a Wise Healthcare Consumer

New Reporting Requirement for W-2s Issued after January 1, 2013

This year, as a part of the Affordable Care Act (ACA), employers are required to report the total calendar year cost of your employer-sponsored health insurance benefits on an employee’s Form W-2. This reporting is for informational purposes only. The value of your employer-sponsored health insurance benefits is not considered taxable income. W-2s issued after January 1, 2013 are required to include this reporting.

Where will the total value of my employer-sponsored health insurance benefits be listed on my W-2?

The guidance requires that employers report the new information on W-2 forms in Box 12, using code DD.

What does the value of the number of Box 12 represent?

The value listed in Box 12 is derived from the calendar year cost of your employer-sponsored Basic UT SELECT Medical plan minus:

Does reporting the cost of coverage on a W-2 have any impact on whether the coverage is taxable?

No. This reporting is informational only and does not mean that employer-provided coverage is taxable.

Does the cost of coverage include both the portion of the cost paid by the employer and the portion of the cost paid by the employee?

Yes. The cost of coverage includes both the portion of the cost paid by the employer and the portion of the cost paid by the employee.

What is not included in the total cost of coverage?

According to IRS Notice 2012-9, applicable employer-sponsored coverage does not include:

For more information, the IRS created a YouTube video to explain the requirement for reporting health insurance coverage on W-2s. If you have additional questions regarding this reporting requirement, please contact your institution’s Payroll office.