PPACA W2 Reporting Requirement – Interim Guidance, Part Deux

If at first you don’t succeed…amend and restate! The kinder, gentler IRS has once again amended and restated prior interim guidance for the PPACA W2 reporting requirement. Earlier this month, the IRS issued Notice 2012-9, which supersedes the guidance initially provided in Notice 2011-28, issued in March 2011. This new notice modifies the prior guidance and provides some additional new guidance. Some of the more noteworthy modifications and additions are below…

  • The Notice clarifies that the reporting requirement does not apply to coverage under a health FSA if contributions occur only through employee salary reduction elections (Q&A-19).
  • The Notice provides clarification that an employer is not required to report the cost of coverage under a dental or vision plan if the benefits meet the requirements for being considered excepted benefits under HIPAA (Q&A-20).
  • New guidance provides that employers are not required to report the cost of coverage under an EAP, wellness program, or on-site medical clinic if the employer does not charge a premium with respect to that type of coverage when provided under COBRA to a qualifying beneficiary (Q&A-32).
  • The Notice also clarifies the application of the exception for certain “independent, noncoordinated benefits,” such as hospital indemnity or fixed indemnity insurance, that are offered to employees on an after-tax basis (Q&A-37 and Q&A-38).
Keep in mind that the PPACA W2 Requirement is only applicable to employers filing greater than 250 W2s for 2011 — and the first reporting is for 2012 W2s. For employers filing less than 250 2011 W2s, their filing requirement begins with 2013 W2s.
The IRS and Treasury will continue to work to develop regulations addressing these new reporting requirements, and the interim guidance provided in Notice 2012-09 applies until further guidance is issued.

Said another way, I’m certain that we’ve not heard the last from the IRS on this topic.

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