The provision that required employers to report the cost of Medical, Dental and Vision coverage was supposed to go in effect for reporting year 2011. However, that was delayed and the IRS has issued guidance for reporting these amounts (2012-9) for 2012 W-2's.
In a nutshell, the IRS stated that all employers who have issued more than 250 W-2's will be required to show the value of the employer sponsored medical, dental and vision coverage on their employees 2012 W-2's. The cost of coverage does not include contributions made to a Health Savings Account (HSA), Medical Savings Account (MSA) or Health Reimbursement Arrangements.
In calculating the cost of coverage to be reported, the IRS indicated that this amount would be the same amount used to calculate the COBRA cost, not including the 2% administration fee, if any.
Those employers who file less that 250 W-2's are exempt from this provision at least through 2012.
The big question is why does the IRS want this information? They state it's for informational purposes only. Two thoughts: This could be a way for the Fed to determine if their is coverage in place in regards to the "no coverage penalty" or a way for the Fed to tax those "Cadillac Plans" in 2018.
