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W-2 reporting requirements: What school districts and local governments need to know now

About the requirement
With the start of a new year, public employers, both fully-insured and self-insured should consider how the Affordable Care Act (ACA) has changed W-2 form reporting requirements. Aiming to provide workers with more information about their healthcare costs, the IRS originally mandated employers report the aggregate cost of employer-sponsored group health plan coverage on their employees’ W-2 form, beginning in the 2011 tax year. However, the IRS later made reporting optional for 2011 employees. 

Who is affected
Currently, the W-2 reporting requirements only apply to businesses and government bodies that issue 250 or more W-2s. This means the new reporting standards are optional for employers with fewer than 250 issued W2s and will remain so until the IRS provides further guidance for the coming years. To view the ACA W-2 regulations, visit the
IRS website.

Reporting requirements
Employers affected by the requirement must report information related to coverage under any group plan they offer that is excluded from the employee’s gross income. It does not matter who actually pays for coverage.

Some types of coverage do not need to be reported under the W-2 requirement. These include:

  • Coverage under a Health Reimbursement Arrangement (HRA).
  • Coverage for Long-Term Care.
  • Coverage under a dental or vision plan that is not integrated into a group health plan.
  • Coverage under a self-insured plan that is not subject to COBRA
  • Coverage under a multi-employer plan.
  • Accident, disability income, liability insurance or workers compensation benefits.
  • Most hospital indemnity or other fixed indemnity insurance.
  • Coverage under an EAP, wellness program or on-site clinic if you do not charge COBRA beneficiaries a premium for these benefits.

For further information, please download our Legislative Brief: Form W-2 Reporting Requirements  or view this video. 

To notify employees of the change, feel free distribute the Benefit Bulletin to all your employees.

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Erin Woulfe
Erin Woulfe
Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization or just providing tips and how-to’s to help them make their job easier.”

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