The Total Cost of Healthcare?

February 10, 2012

Starting in tax year 2012, the “aggregate cost” of employer-sponsored health plans is required to be reported in Box 12 (Code DD) of Form W-2.  This amount includes the costs paid by both the employer and employee, regardless of whether those contributions were pre-tax or after-tax.   This provision, IRC §6051(a)(14), applies to employers with 250 or more employees starting in 2012 and will apply to employers with less than 250 employees starting in 2013.  The aggregate cost does not include the amount of any salary reduction contributions to a flexible spending arrangement, any amounts contributed to Health Savings Accounts, or the cost of separate dental or vision plans.

See IRS Notice 2012-9 for more information.

Contact Mark Gossart, Partner, at 301.231.6278 email or Ryan Ham, Tax Manager, at 301.231.6295 or if you have any further questions.