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November 08, 2010
IRS Update: Healthcare Cost Reporting Requirement Deferred

The Internal Revenue Service (IRS), in its announcement of a new draft Form W-2 for 2011 in October, noted that it would defer the new requirement for employers to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.

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The draft Form W-2 does include the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan, according to the announcement.

Notice 2010-69 (www.irs.gov/pub/irs-drop/n-2010-69.pdf), states, “The Treasury Department and the IRS have determined that this relief [deferred reporting requirement] is appropriate to provide employers with additional time to make any necessary changes to their payroll systems or procedures in preparation for compliance with the reporting requirement.”

The announcement about the draft Form W-2 also reminds employers, “Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act passed by Congress in March, the new reporting requirement is intended to be informational only, and to provide employees with greater transparency into overall healthcare costs.”

You can review the draft W-2 form on the IRS website. Keep in mind that it is a draft and is subject to change prior to final approval. Any comments regarding the draft may be submitted through the IRS web site.

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