Note: This should not be taken as tax or legal advice. NO. Nothing in the new legislation removes the tax exclusion for employer-sponsored health insurance.
Earlier this year, we discussed how
health care reform affects annual W-2 reporting. Beginning in the 2011 tax year, employers will be required to report the cost of employer-sponsored coverage on an employee's W-2.
Many insurance agents and employers have misinterpreted this requirement. To help clarify this, the Internal Revenue Service (IRS) recently released the
following explanation:
"Starting in tax year 2011, the
Affordable Care Act requires employers to report the value of the health insurance coverage they provide employees on each employee's annual Form W-2. This reporting is for informational purposes only, to show employees the value of their health care benefits so they can be more informed consumers. The amount reported does not affect tax liability, as the value of the employer contribution to health coverage continues to be excludible from an employee's income and it is not taxable."
