Types of Coverage Subject to Form W-2 Reporting

The Affordable Care Act (ACA) requires employers to report the aggregate cost of employer-sponsored group health coverage on employees’ Forms W-2. This reporting requirement is intended to provide employees with useful and comparable information on the cost of their health coverage. It does not cause employer-provided health coverage to become taxable.

This ACA Overview includes a chart provided by the Internal Revenue Service (IRS) to outline the types of coverage subject to the Form W-2 reporting requirement. This chart reviews the Form W-2 reporting requirements for health coverage, and has no impact on requirements to report these items elsewhere.

It includes only the information that must be reported in box 12 of Form W-2, using Code DD, as required under Internal Revenue Code (Code) Section 6051(a)(14) (enacted as part of the ACA). It does not cover any existing Form W-2 reporting requirements.

COVERAGE TYPE	FORM W-2, BOX 12, CODE DD
	REPORT ON FORM W-2	DO NOT REPORT ON FORM W-2	OPTIONAL REPORTING
Major Medical	X
Dental or vision plan not integrated into another medical or health plan			X
Dental or vision plan which gives the choice of declining or electing and paying an additional premium			X
Health Flexible Spending Arrangement (health FSA) funded solely by salary-reduction amounts		X
Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits	X
Health Reimbursement Arrangement (HRA) contributions			X
Health Savings Arrangement (HSA) contributions (employer or employee)*		X
Archer Medical Savings Account (Archer MSA) contributions (employer or employee)*		X
Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis		X
Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer	X
Employee Assistance Plan (EAP) providing applicable employer-sponsored health care coverage	Required if employer charges a COBRA premium		Optional if employer does not charge a COBRA premium
On-site medical clinics providing applicable employer-sponsored healthcare coverage	Required if employer charges a COBRA premium		Optional if employer does not charge a COBRA premium
Wellness programs providing applicable employer-sponsored healthcare coverage	Required if employer charges a COBRA premium		Optional if employer does not charge a COBRA premium
Multi-employer plans			X
Domestic partner coverage included in gross income	X
Governmental plans providing coverage primarily for members of the military and their families		X
Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government		X
Self-funded plans not subject to federal COBRA			X
Accident or disability income		X
Long-term care		X
Liability insurance		X
Supplemental liability insurance		X
Workers' compensation		X
Automobile medical payment insurance		X
Credit-only insurance		X
Excess reimbursement to highly compensated individual, included in gross income		X
Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income		X

*This ACA reporting does not apply to amounts contributed to an Archer MSA or amounts contributed to an HSA. Those amounts are already required to be separately accounted for on the Form W-2. Thus, even small employers must report all employer contributions (including an employee's contributions through a cafeteria plan) to an HSA on Form W-2.

OTHER SITUATIONS	REPORT ON FORM W-2	DO NOT REPORT ON FORM W-2	OPTIONAL REPORTING
Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers)			X
Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of that year			X
Forms W-2 provided by third-party sick-pay provider to employees of other employers			X

Source: Internal Revenue Service