Starting in 2013, employers with fewer than 250 employees must report healthcare premium benefits on employee W-2s. If you provide healthcare coverage benefits for employees, you’ll need to provide your payroll provider with the information or make certain that your in-house W-2 preparation includes it at the end of the year.
A requirement of the Affordable Healthcare Act (ACA) this requirement went into effect in 2011, but employers with fewer than 250 employees had a reporting exception until now.
No Tax Impact for Employees
This is informational reporting only. Generally, the amount reported should be the total cost, both employer paid portion and the employee’s contribution amount. It will not increase an employee’s taxes but it will reinforce the cost of the healthcare benefits you provide for them.
Additional Healthcare Premium Reporting Information
If you are using an outside payroll service, they should be able to advise you about how and what to report. If you do it yourself or need additional information, there is a Frequently Asked Questions page on the IRS site.