Boxed in by Box 12 on the W-2

Another update from the Jungle…

unnamedMaryann handles payroll questions for her employer.  She and her coworkers have been scrambling for a couple of years to ensure they comply with the Affordable Care Act (ACA).  Last year was all about finding a software program that would allow the company to track the hours of its temporary employees.

This year, Maryann is looking at box 12 on the W-2. That’s the box where employers need to plug in the cost of the medical plan for the employee.  Filling in this information is mandatory only for employers who filed at least 250 W-2’s in the previous tax year, meaning in 2013.  Maryann’s company filed 170 W-2’s in 2013, so they aren’t required to complete box 12 for the 2014 tax year.

She knows that this January her company will issue 200 W-2’s covering the 2014 tax year.  She thinks that number will rise to 250 during 2015.  Maryann wants to get a head start on figuring out box 12 after some of the past fiascos in trying to comply with the ACA.

What should Maryann consider?

  1. Maryann knows that the “cost” or “value” of health coverage refers to the premium paid for medical coverage in the health plan, known as “major medical”. She needs to verify what other costs, such as FSA contributions and dental and vision premiums, may need to be included.
  2. Maryann can consult her company’s CPA firm for assistance on completing box 12.
  3. Maryann can do some research in the ACA section of the IRS website during her spare time.

Update:  According to the IRS website, no new guidance has been issued in the past year. As a result, reporting the cost of the employee medical plan in Box 12 is required only for employers who filed 250 W-2’s in the previous tax year.  Employers who filed less than 250 W-2’s in the previous tax year may voluntarily report the medical plan cost in Box 12.

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.


To download my free ebook, click here.

Join the HR Compliance Jungle today. Click here!

Follow us on Facebook & Twitter!

Visit us: http://www.complianceriskadvisor.com/