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White House delays W-2 provision in new law
Story Date: 10/13/2010
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Source: Meghan McCarthy, 10/12/10
The Obama administration today announced a one-year delay of a provision of the health care law requiring employers to report the cost of health insurance coverage on employees' W-2 tax forms, saying the extra time is necessary to give employers time to prepare to comply with the requirement.
Under the overhaul law, all employers who provide health insurance are required to include the information on workers' tax forms after 2010. But instead of a mandatory reporting requirement, the IRS' draft 2011 W-2 tax form includes an optional line for employers to report the cost of employer-sponsored health insurance coverage.
"We appreciate the IRS' quick work on coming out with a draft, and the transition relief. Employers are currently being buried under a tsunami of regulations by the Administration, so the one-year delay is helpful," said James Gelfand, senior manager of health policy at the Chamber of Commerce.
The White House used the announcement to get out in front of criticism that the health care law would lead to new taxes on health coverage.
"And because this has been the subject of rumors, let's be clear: You will absolutely not pay taxes on these benefits," wrote Stephanie Cutter, the White House's communications leader on implementing the health law.
"For months, opponents of health reform have falsely claimed that the Affordable Care Act would lead to the taxation of health care benefits. The claim wasn't true when the rumor first surfaced, it isn't true today, and it won't be true tomorrow."
The W-2 form is still subject to approval by the Office of Management and Budget. The administration says giving employees information on the value of their insurance plans will help "empower consumers," but some in the business community warn that it is just a first step to taxing individuals'
health benefits.
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