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April 30, 2010 | HR Compliance | Posted by Ascentis Thought Leadership

The Affordable Care Act Will Require that Employers Fully Disclose Cost of Health Coverage

Starting in 2011, employers will be required to disclose the entire cost of "employer-sponsored" coverage on the employee's Form W-2. Regardless of who pays for the coverage, the combined cost of coverage is determined by rules similar to those used to determine the applicable premiums for purposes of the COBRA continuation coverage requirements of group health plans.

Employers are required to report the total value of all policies. Applicable coverage does not include coverage for a specified disease, long-term care, accidents or disability income insurance, nor does it include salary reduction contributions to a flexible spending account or contribution to an Archer medical savings account or a health savings account of the employee or a spouse.

This provision requires only the disclosure of all coverage costs as an aggregate, and does not require a breakdown of the individual types or policies of the coverages involved. For example, if an employee has an employer-sponsored medical plan, a dental plan and a vision plan, the employer should report only the total costs of these plans, and not the costs associated with each individual plan.

Click here to read Section 9002 of the Patient Protection and Health Care Affordability Act.

Click here to read the H.R. 4872 - Health Care and Education Affordability Reconciliation Act o f2010 LEGISLATIVE NOTICE

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