ERIC Urges IRS Not to Impose Undue Burdens on Group Health Plan W-2 Reporting Requirements

July 15, 2011


ERIC News Release
For Immediate Release: July 15, 2011

Washington, D.C. -- The ERISA Industry Committee (ERIC) in comments submitted today urged the Treasury Department and Internal Revenue Service not to impose unnecessary burdens on employers in implementing the reporting requirements for the cost of group health plan coverage on W-2 forms.

ERIC's comment letter

The IRS on March 29 issued Notice 2011-28 providing guidance and requesting comments on how to report the cost of health coverage on an employee's W-2, based on the requirement added to the Internal Revenue Code by the Patient Protection and Affordable Care Act.

ERIC commended the agencies for postponing the reporting deadline and recognizing the difficulties that employers will face in complying with the new reporting requirement. Originally, this reporting was scheduled to take effect for the 2011 tax year, but the government delayed this deadline so that the new W-2 reporting is applicable for the 2012 tax year (that is, for W-2's provided in January 2013).

ERIC offers several recommendations to ease the new W-2 reporting burdens, particularly with respect to retirees and former employees that receive post-separation compensation from an employer. In this case, ERIC urges that an employer not be required to include the cost of health coverage on W-2s provided to these individuals. ERIC contends that such a requirement would impose substantial burdens on employers while conferring no additional benefit on retirees.

"There is no policy justification for requiring employers to report the cost of employer-sponsored health coverage to retirees merely because the retirees happen to receive post-separation payments that are reportable on Form W-2," said ERIC President Mark Ugoretz.

In addition, ERIC recommends that a dental or vision plan should be exempt from the reporting requirements if the facts and circumstances indicate that the plan is not an integral part of a group health plan. ERIC contends that the current test for determining whether a self-insured dental or vision plan is "integral" to a group health plan is too narrow, and should be expanded to recognize a broader range of circumstances.


For more information:
Ted Godbout
Director, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400

The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.