Fed requirement to disclose cost of healthcare benefits per employee is coming

Fed requirement to disclose cost of healthcare benefits per employee is coming

WANADA members should know that as early as next year some will need to disclose to each employee how much they are spending on them to provide healthcare benefits. The requirement is part of Healthcare Reform and is intended to test the hypothesis that employees would be more careful in using their healthcare benefits if they really knew how much it cost the employer to provide the coverage.

Businesses with 250 or more employees will be required to indicate the cost on the employees W-2 form for calendar year 2012 (that is, the forms required for the calendar year 2012 that employers generally are required to furnish to employees in January 2013 and then file with the Social Security Administration). Those with fewer employees have until calendar year 2013 to comply.

Dealers should know the reporting requirement does NOT result in any excludable employer provided healthcare coverage becoming taxable. The IRS statement on this requirement is Notice 2011-28 and can be found at http://www.irs.gov/pub/irs-drop/n-11-28.pdf

Employers who fail to include the information, however, are subject to the regular penalties for failing to file a correct W-2. The penalties include:

*$30 per Form W-2 if correctly filed within 30 days (by March 30 if the due date is February 28); maximum penalty $250,000 per year ($75,000 for small businesses, defined below).

*$60 per Form W-2 if correctly filed more than 30 days after the due date but by August 1; maximum penalty $500,000 per year ($200,000 for small businesses).

*$100 per Form W-2 if filed after August, or if Forms W-2 arent filed; the maximum penalty is $1,500,000 per year ($500,000 for small businesses).

A small business is defined as having average annual gross receipts for the three most recent tax years of $5 million or less.