IRS Issues Guidance on Reporting Health Cover Costs on Employees’ W-2s

By Jerry Geisel

Jan. 4, 2012

Newly released Internal Revenue Service guidance resolves additional questions employers have raised about a health care reform law provision that will require them to report the cost of health care coverage on employees’ W-2 wage and income statements.

Under that requirement, health care cost information will have to be reported on 2012 W-2s, which will be issued in 2013. Under previous IRS guidance, smaller employers—those that distribute fewer than 250 W-2s in 2011—are exempt from this requirement until at least 2014 and possibly longer.

The latest guidance, released Jan. 4, makes clear that employers can—but are not required to—report contributions to health reimbursement arrangements in calculating health care costs.

In addition, the cost of providing coverage through employee assistance programs, wellness programs or on-site medical clinics is not required to be reported if the employer does not charge premiums for the coverage to COBRA beneficiaries.

The guidance also clarifies that the reporting requirement does not apply to Indian Tribal governments.

In all, “This is very helpful guidance,” said Anne Waidmann, a director with PricewaterhouseCoopers L.L.P. in Washington.

The latest guidance also reiterates numerous provisions in last year’s guidance, including that that the cost of coverage that is taxable to employees, such as for a child over age 26, must be reported on the W-2, and that contributions employees make to flexible spending accounts are to be excluded from the health care cost figure.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management.


blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog


EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog


Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness

workforce blog


We are in the midst of a public mental health crisis; how employers can help

Do not ignore these issues or your employees who are living with them. Mental health illnesses are no d...

ADA, benefits, Coronavirus, FMLA, mental health, paid time off