Employers who filed more than 250 W-2s in the prior calendar year must report the cost of employer-sponsored healthcare coverage on employees’ W-2s. Employers required to report must do so before issuing employees’ W-2s, which are due to employees no later than January 31, 2020.


Which employers must report the cost of healthcare coverage on employees’ W-2s?

Employers who filed 250 or more W-2 forms in the previous calendar year must report. This means that employers who filed more than 250 W-2s in 2018 must report the cost of coverage on W-2s in 2019.


What information do employers need to report?

Employers must report the amounts paid by both the employer and employee for health care coverage on the W-2 forms, if applicable. The IRS provides a helpful chart on which types of benefits must be reported, as well as a questions and answers section for additional guidance.


How do employers report the cost of coverage?

Employers should work with their payroll vendor/team to include the cost of coverage on employee W-2s. Employers must report the cost of coverage in Box 12 of the Form W-2, with Code DD to identify the amount. The IRS has provided guidance and more information on this reporting requirement here.


Employer Action Items:

Employers required to report should work with their payroll team/vendor to include both the employee and employer cost of healthcare coverage on employee W-2s.


Additional Resources:

Please refer to the IRS guidance and IRS Q & A’s for additional information.  The IRS guidance page provides a chart that illustrates the types of coverage that must be reported on the form W-2.  IRS Notice 2012-9 also provides further guidance on this reporting requirement.


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Emerald Law – Emerald is a Client Compliance Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music and writing non-fiction.