WASHINGTON – Recently, the IRS issued Notice 2012-9, called “Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage.” The notice is part of the Affordable Care Act, which originally required employers to report the cost of coverage provided through an employer-sponsored group health plan, beginning in tax year 2011.

Now, after two previous notices offering temporary relief, the most recent guidance is presenting additional information to help employees and employers understand the value of their healthcare benefits. Here are six points to note, among other apprises and information, about the updated healthcare reporting requirements from the IRS.

1. According to the notice, clearer guidelines help demonstrate that the reporting requirement doesn’t apply to coverage under a health flexible spending arrangement (FSA), if contributions only occur through employee salary reductions. 

2. The notice clarifies that the reporting requirement doesn’t apply to the cost of coverage includible in income under § 105(h), or payments or reimbursements of health insurance premiums for a two percent shareholder-employee of an S corporation, who is required to include the premium payments in gross income.

3. Additionally, the notice explains employers aren’t required to include the cost of coverage under an employee assistance program. This also includes employee wellness programs or onsite medical clinic in the reportable amount if the employer doesn’t charge a premium with respect to that type of coverage provided under COBRA to a qualifying beneficiary. 

4. The notice states that the reportable amount is not required to be included on a Form W-2 provided by a third-party sick pay provider. 

5. The notice also clarifies that employers may include the cost of coverage under programs not required to be included under applicable interim relief. For example, this could include the cost of coverage under a Health Reimbursement Arrangement. 

6. Lastly, the notice states that employers who would have filed more than 250 Forms W-2 for the previous year, if they haven’t used a payroll agent, would be subject to the reporting requirement.  

Follow Michelle McNickle on Twitter, @Michelle_writes

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