Special Process in the W-2 Reporting of Employer-sponsored Health Coverage

Special process in the W-2 Reporting of Employer-sponsored Health Coverage

 

The Affordable Care Act requires employers to report the value of coverage under an employer-sponsored group health plan on Form W-2 box 12 code DD. Employers are required to report this on the 2016 Form W-2 if they filed 250 or more W-2s per FEIN in 2015. It is optional for all other employers until further notice.

 

To report the Employer-sponsored Health Coverage in NetSuite, follow the steps below:

 

1.  Create two Earning: Addition items by navigating to List > Employees > Payroll Items > New.

•         1^st Earning: Addition: 

 

PayCode = Cost of Employer-Sponsored Health Coverage

Amount/Rate – should be positive

 

•         2^nd Earning: Addition:

 

PayCode = Cost of Employer-Sponsored Health Coverage (Offset)

Amount/Rate – should be negative

 

 

2.  Save and Edit the payroll items above and put a check on the Apply box to include it on the employee record's Earning items.

 

3.  Perform an update on the payroll information via Setup > Payroll > Update Payroll Information.  Put a check on Agree and click on Commit Updates.

 

4.  Create a paycheck to include the two items or it create a payroll adjustment via Transactions > Employees > Create payroll adjustment.

 

Note:

a. Use the same Expense account on the two payroll items.

b. This reporting is informational only; it does not change the taxability of the benefits.

c. Refer to IRS publication on Form W-2 Reporting of Employer-Sponsored Health Coverage: http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

Form W-2 Reporting of Employer-Sponsored Health Coverage

Coverage Type Form W-2, Box 12, Code DD

Report Do Not Report Optional

Major medical X  

Dental or vision plan not integrated into another medical or health plan X

Dental or vision plan which gives the choice of declining or electing and paying an additional premium X

Health Flexible Spending Arrangement (FSA) funded solely by salary-reduction amounts X  

Health FSA value for the plan year in excess of employee's cafeteria plan salary reductions for all qualified benefits X  

Health Reimbursement Arrangement (HRA) contributions X

Health Savings Arrangement (HSA) contributions (employer or employee) X  

Archer Medical Savings Account (Archer MSA) contributions (employer or employee) X  

Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis X  

Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer X  

Employee Assistance Plan (EAP) providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium Optional if employer does not charge a COBRA premium

On-site medical clinics providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium Optional if employer does not charge a COBRA premium

Wellness programs providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium Optional if employer does not charge a COBRA premium

Multi-employer plans X

Domestic partner coverage included in gross income X  

Governmental plans providing coverage primarily for members of the military and their families X  

Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government X  

Self-funded plans not subject to Federal COBRA X

Accident or disability income X  

Long-term care X  

Liability insurance X  

Supplemental liability insurance X  

Workers' compensation X  

Automobile medical payment insurance X  

Credit-only insurance X  

Excess reimbursement to highly compensated individual, included in gross income X  

Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income X  

Other Situations Report Do Not Report Optional

Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers) X

Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of that year X

Forms W-2 provided by third-party sick-pay provider to employees of other employers