CLICK HERE t return t the hme page IRS Ntice 2012-9 I. PURPOSE This ntice restates and amends the interim guidance n infrmatinal reprting t emplyees f the cst f their emplyer-spnsred grup health plan cverage initially prvided in Ntice 2011-28, 2011-16 I.R.B. 656. This infrmatinal reprting is required under 6051 (a) (14) f the Internal Revenue Cde (Cde), enacted as part f the Patient Prtectin and Affrdable Care Act f 2010 (the Affrdable Care Act), Public Law, 111-148, t prvide useful and cmparable cnsumer infrmatin t emplyees n the cst f their health care cverage. Ntice 2011-28 slicited cmments n varius aspects f the reprting requirement. In respnse t cmments, this ntice supersedes Ntice 2011-28 and makes the fllwing changes t the guidance prvided in Ntice 2011-28: Mdifies Q&A-3 t prvide that until further guidance is issued, the reprting requirement will nt apply t tribally chartered crpratins whlly wned by Federally recgnized Indian tribal gvernments. Mdifies Q&A-3 t clarify the applicatin f the interim relief frm the reprting requirement fr emplyers filing fewer than 250 Frms W-2 fr the preceding calendar year. Mdifies Q&A-7 t clarify the applicatin [*2] f the reprting requirement t certain related emplyers nt using a cmmn paymaster. Adds a new example t Q&A-19 that demnstrates that the reprting requirement des nt apply t cverage under a health flexible spending arrangement (FSA) if cntributins ccur nly thrugh emplyee salary reductin electins. Mdifies Q&A-20 t clarify that the standard fr determining whether cverage under a dental plan r visin plan is subject t the reprting requirement is based upn the same standard fr determining whether the cverage is subject t the rules set frth in the regulatins under the Health Insurance Prtability and Accuntability Act f 1996 (HIPAA). Mdifies and crrects Q&A-23 t clarify that the reprting requirement des nt apply t the cst f cverage includible in incme under 105 (h), r payments r
reimbursements f health insurance premiums fr a 2% sharehlder-emplyee f an S crpratin wh is required t include the premium payments in grss incme. Mdifies Q&A-28 t clarify the applicatin f the reprting requirement if a cmpsite rate is used with respect t the premium charged active participants, but nt the premium charged under COBRA t a qualifying [*3] beneficiary. The ntice als prvides the fllwing additinal guidance thrugh new Q&A's: Prvides that emplyers are nt required t include the cst f cverage under an emplyee assistance prgram (EAP), wellness prgram, r n-site medical clinic in the reprtable amunt if the emplyer des nt charge a premium with respect t that type f cverage prvided under COBRA t a qualifying beneficiary (Q&A-32). Clarifies that emplyers may include the cst f cverage under prgrams nt required t be included under applicable interim relief, such as the cst f cverage under a Health Reimbursement Arrangement (HRA) (Q&A-33). Clarifies hw t calculate the reprtable amunt fr cverage nly a prtin f which cnstitutes cverage under a grup health plan (Q&A-34). Clarifies hw t calculate the reprtable amunt if an emplyer is prvided ntice after December 31 f a calendar year f events that ccurred n r befre December 31 f a calendar year that affect the prir year's cverage, such as an emplyee prviding an emplyer ntice f a divrce r ther change in family status that ccurred during a prir calendar year (Q&A-35). Clarifies hw t calculate the reprtable amunt [*4] where cverage extends ver the payrll perid including December 31 (Q&A-36). Clarifies the applicatin f the exceptin fr certain hspital indemnity r ther fixed indemnity insurance ffered by an emplyer n an after-tax basis (Q&A-37 and Q&A-38). Prvides that the reprtable amunt is nt required t be included n a Frm W-2 prvided by a third-party sick pay prvider (Q&A-39). This reprting t emplyees is fr their infrmatin nly. The reprting is intended t infrm them f the cst f their health care cverage, and des nt cause excludable emplyer-prvided health care cverage t becme taxable. Nthing in 6051 (a) (14), this ntice, r the additinal
guidance that is cntemplated under 6051 (a) (14), causes r will cause therwise excludable emplyer-prvided health care cverage t becme taxable. Sectin 6051 (a) (14) was added t the Cde by 9002 f the Affrdable Care Act, and prvides that the reprting be made n Frm W-2, Wage and Tax Statement. Ntice 2010-69, 2010-44 I.R.B. 576, prvides that this reprting will nt be mandatry fr 2011 Frms W-2 (that is, the frms required fr the calendar year 2011 that emplyers are generally required t give emplyees [*5] by the end f January 2012 and then file with the Scial Security Administratin (SSA)). This ntice prvides interim guidance that generally is applicable beginning with 2012 Frms W-2 (that is, the frms required fr the calendar year 2012 that emplyers are generally required t give emplyees by the end f January 2013 and then file with the SSA). In additin, emplyers may rely n the guidance prvided in this ntice if they vluntarily chse t reprt the cst f cverage n 2011 Frms W-2, even thugh this reprting is nt required fr 2011. This interim guidance is applicable until further guidance is issued. Treasury and the IRS will cntinue t cnsider cmments submitted in respnse t Ntice 2011-28 as they wrk t develp regulatins under 6051 (a) (14). T the extent that future guidance applies the reprting requirement t additinal emplyers r categries f emplyers r additinal types f cverage, that guidance will apply prspectively nly and will nt apply t any calendar year beginning within six mnths f the date the guidance is issued. As explained abve, this ntice prvides transitin relief fr certain emplyers and with respect t certain types f emplyer-spnsred [*6] cverage. This transitin relief will be available at least fr 2012 Frms W-2 and the availability f this transitin relief fr 2012 Frms W-2 will nt be affected by the issuance f any further guidance. Thus, reprting by emplyers and with respect t the types f cverage cvered by the exceptins prvided in this ntice will nt be required fr 2012 Frms W-2. Fr example, as prvided in Q&A-3 f this ntice, emplyers that are required t file fewer than 250 2011 Frms W-2 will nt be subject t the reprting requirement fr 2012 Frms W-2. The interim guidance is set frth in sectin III f this ntice. Q&A-1 and Q&A-2 discuss the general requirements. Q&A-3 identifies the emplyers subject t the reprting requirements. Q&A-4 thrugh Q&A-10 prvide the methds fr reprting the cst f the cverage n the Frm W-2. Q&A-11 thrugh Q&A-15 define certain terms related t the cst f cverage required t be reprted n the Frm W-2. Q&A-16 thrugh Q&A-23 set frth the types f cverage the cst f which is required t be included in the amunt reprted n the Frm W-2. Q&A-24 thrugh Q&A-27 describe several calculatin methds that may be used t determine the cst f the cverage. [*7] Q&A-28 thrugh Q&A-31 address a number f ther issues emplyers may encunter in determining the cst f the cverage. Q&A-32 thrugh Q&A-38 cntain additins t the guidance initially set frth in Ntice 2011-28. Sectin IV f this ntice cntains transitin relief fr certain emplyers and with respect t certain types f emplyer-spnsred cverage. Sectin V f this ntice states that Ntice 2011-28 is superseded. II. BACKGROUND Sectin 6051 (a) prvides generally that an emplyer must prvide a written statement t each emplyee shwing the remuneratin paid by such persn t such emplyee during the calendar year n r befre January 31 f the succeeding year (r, if the emplyee terminates emplyment during the year, within 30 days after the date f receipt f a written request frm such emplyee submitted befre January 2). Frm W-2, Wage and Tax Statement, is the frm used t prvide an emplyee this infrmatin.
Sectin 6051 (a) (14) prvides generally that the aggregate cst f applicable emplyerspnsred cverage must be included in the infrmatin reprted n Frm W-2, effective fr taxable years beginning n r after January 1, 2011. Sectin 6051 (a) (14), prvides that, [*8] fr this purpse, the aggregate cst is t be determined under rules similar t the rules f 4980B (f) (4), referring t the definitin f the "applicable premium" fr purpses f COBRA cntinuatin cverage. Sectin 6051 (a) (14) des nt apply t the amunt cntributed t any Archer MSA (as defined in 220 (d)) r t any health savings accunt (as defined in 223 (d)) f an emplyee r an emplyee's spuse. See 6051 (a) (11) and (a) (12). Sectin 6051 (a) (14) als des nt apply t the amunt f any salary reductin cntributins t a health flexible spending arrangement (within the meaning f 106 (c) (2) and 125). Sectin 6051 (a) (14) prvides that the aggregate cst f applicable emplyer-spnsred cverage (the amunt required t be reprted n Frm W-2) has the same meaning as in 4980I (d) (1). Sectin 4980I (d) (1) (A) prvides that the term "applicable emplyer-spnsred cverage" means, with respect t any emplyee, cverage under any grup health plan made available t the emplyee by an emplyer which is excludable frm the emplyee's grss incme under 106, r wuld be s excludable if it were emplyer-prvided cverage (within the meaning f 106). Sectin 4980I (f) (4) [*9] prvides that, fr purpses f 4980I (d) (1), the term "grup health plan" has the same meaning as under 5000 (b) (1). Under 4980I (d) (1) (B), the term "applicable emplyer-spnsred cverage" des nt include (i) any cverage (whether thrugh insurance r therwise) described in 9832 (c) (1) (ther than cverage fr n-site medical clinics described in subparagraph (G) theref) r fr lng-term care, r (ii) any cverage under a separate plicy, certificate, r cntract f insurance which prvides benefits substantially all f which are fr treatment f the muth (including any rgan r structure within the muth) r fr treatment f the eye, r (iii) any cverage described in 9832 (c) (3) the payment fr which is nt excludable frm grss incme and fr which a deductin under 162 (l) is nt allwable. The types f cverage described in 9832 (c) (1) (prviding that certain "excepted benefits" are nt subject t the requirements f chapter 100 f the Cde) that are nt subject t this reprting requirement are the fllwing: cverage nly fr accident, r disability incme insurance, r any cmbinatin theref; cverage issued as a supplement t liability insurance; liability [*10] insurance, including general liability insurance and autmbile liability insurance; wrkers' cmpensatin r similar insurance;
autmbile medical payment insurance; credit-nly insurance; ther similar insurance cverage, specified in regulatins, under which benefits fr medical care are secndary r incidental t ther insurance benefits. The types f cverage described in 9832 (c) (3) include the fllwing, prvided that such cverage is ffered as independent, nncrdinated benefits: (A) cverage nly fr a specified disease r illness; and (B) hspital indemnity r ther fixed indemnity insurance. Sectin 4980I (d) (1) (C) prvides that cverage shall be treated as applicable emplyerspnsred cverage withut regard t whether the emplyer r emplyee pays fr the cverage. Sectin 4980I (d) (1) (E) prvides that applicable emplyer-spnsred cverage shall include cverage under any grup health plan established and maintained primarily fr its civilian emplyees by the Gvernment f the United States, by the gvernment f any State r plitical subdivisin theref, r by any agency r instrumentality f any such gvernment. Sectin 4980B (f) (4) (A) prvides that the term "applicable [*11] premium" means, with respect t any perid f cntinuatin cverage f qualified beneficiaries, the cst t the plan fr such perid f the cverage fr similarly situated beneficiaries with respect t whm a qualifying event has nt ccurred (withut regard t whether such cst is paid by the emplyer r emplyee). Sectin 4980B (f) (4) (B) prvides a special rule fr self-insured plans, generally requiring that such plans calculate the applicable premium thrugh ne f tw methds - the actuarial methd r the past cst methd. Sectin 4980B (f) (4) (C) prvides that the determinatin f any applicable premium shall be made fr a perid f 12 mnths and shall be made befre the beginning f such perid. Sectin 54.4980B-1, Q&A-2 f the Miscellaneus Excise Tax Regulatins, prvides that, fr purpses f 4980B, fr tpics relating t the COBRA cntinuatin cverage requirements f 4980B that are nt addressed in 54.4980B-1 thrugh 54.4980B-10 (such as methds fr calculating the applicable premium), plans and emplyers must perate in gd faith cmpliance with a reasnable interpretatin f the statutry requirements in 4980B. III. INTERIM GUIDANCE This interim guidance generally [*12] is applicable t 2012 Frms W-2 (that is, the frms required fr the calendar year 2012 that emplyers generally are required t furnish t emplyees by the end f January 2013 and then file with the SSA) and Frms W-2 fr later years. In additin, emplyers may rely n the guidance prvided in this ntice if they vluntarily reprt the cst f cverage n 2011 Frms W-2, even thugh such reprting is nt required fr 2011. This interim guidance is applicable until further guidance is issued. T the extent that future guidance applies the reprting requirement t additinal emplyers r categries f emplyers,
additinal types f cverage, r therwise applies the reprting requirement mre expansively, that guidance will apply prspectively nly and will nt apply t any calendar year beginning within six mnths f the date the guidance is issued. See als Sectin IV f this ntice fr certain transitin relief that will be extended at least fr the 2012 Frms W-2. Except as therwise specified, the interim guidance in this sectin applies slely fr purpses f 6051 (a) (14) and n inference shuld be drawn cncerning any ther prvisin f the Cde. In General (Q&A-1 and Q&A-2) Q-1: [*13] What des 6051 (a) (14) require? A-1: Sectin 6051 (a) (14) generally requires the aggregate cst f applicable emplyerspnsred cverage t be reprted n Frm W-2. Q-2: Des the requirement under 6051 (a) (14) t reprt the aggregate cst f emplyerspnsred cverage n Frm W-2, r cmpliance with this requirement, have any impact n whether such cverage is taxable? A-2: N. The requirement is infrmatinal nly. The prvisins f 6051 (a) (14) d nt affect whether any particular cverage is excludable frm grss incme under 106 r any ther Cde prvisin, and the reprting f any amunt n Frm W-2 in cmpliance with the requirements f 6051 (a) (14) will nt affect the amunt includable in incme r the amunt reprted in any ther bx n Frm W-2. The purpse f the reprting is t prvide useful and cmparable cnsumer infrmatin t emplyees n the cst f their health care cverage. Emplyers Subject t the Reprting Requirement (Q&A-3) Q-3: What emplyers are subject t the reprting requirement under 6051 (a) (14)? A-3: Except as prvided in this Q&A-3, all emplyers that prvide applicable emplyerspnsred cverage (see Q&A-12) during a calendar year are [*14] subject t the reprting requirement under 6051 (a) (14). This includes emplyers that are federal, state and lcal gvernment entities, churches and ther religius rganizatins, and emplyers that are nt subject t the COBRA cntinuatin cverage requirements under 4980B, t the extent such emplyers prvide applicable emplyer-spnsred cverage under a grup health plan. (Ntice 2010-69, 2010-44 I.R.B. 576, prvides that reprting by these emplyers is nt mandatry prir t the issuance f the 2012 Frms W-2 (the frms required fr the calendar year 2012 that emplyers generally are required t furnish t emplyees by the end f January 2013 and then file with the Scial Security Administratin (SSA))). Emplyers that are Federally recgnized Indian tribal gvernments are nt subject t the reprting requirements f 6051 (a) (14). Until further guidance is issued, emplyers that are tribally chartered crpratins whlly-wned by a Federally recgnized Indian tribal gvernment als are nt subject t the reprting requirements. Als, in the case f the 2012 Frms W-2 (and Frms W-2 fr later years unless and until further guidance is issued), an emplyer is nt subject [*15] t the reprting requirement fr any calendar year if the emplyer was required t file fewer than 250 Frms W-2 fr the preceding calendar year. (This rule is based upn the rule in 6011 (e) that exempts emplyers frm filing returns electrnically if they file fewer than 250 returns.) Therefre, if an emplyer is required t file fewer than 250 2011 Frms W-2, the emplyer wuld nt be subject t the reprting requirement fr 2012 Frms W-2. Fr this purpse, whether an emplyer is required t file fewer than 250 Frms W-2 fr a calendar year is determined based n the Frms W-2 that emplyer wuld be required t file if it filed Frms W-2 t reprt all wages paid by that emplyer and withut regard t the use f an agent under 3504. Fr example, an emplyer that
wuld have filed nly 100 Frms W-2 fr the previus year had it nt used an agent under 3504 will nt be subject t the reprting requirement fr the year, nr will an agent under 3504 with respect t that emplyer's Frms W-2 fr the year. In cntrast, if the same emplyer wuld have filed 300 Frms W-2 fr the previus year had it nt used an agent under 3504 f the Cde, that emplyer wuld be subject t the [*16] reprting requirement fr the year s that if an agent under 3504 is used again the infrmatin will need t be prvided t the agent and reprted n the Frm W-2. See als Q&A-21 fr an exceptin t the reprting requirement fr cverage under a selfinsured plan that is nt subject t any federal cntinuatin cverage requirements and Q&A-22 fr an exceptin frm the reprting requirement fr plans maintained primarily fr members f the military, r primarily fr members f the military and their families. Methd f Reprting n the Frm W-2 (Q&A-4 thrugh Q&A-10) Q-4: Is the reprting f the aggregate cst f applicable emplyer-spnsred cverage required fr Frms W-2 issued fr the 2010 r 2011 calendar years? A-4: N. Sectin 6051 (a) (14) des nt apply t Frms W-2 fr calendar years prir t 2011 and, accrdingly, reprting f the aggregate cst f applicable emplyer-spnsred cverage is nt required fr Frms W-2 issued fr the 2010 calendar year. Mrever, Ntice 2010-69 prvides that reprting will nt be mandatry fr the 2011 calendar year and, accrdingly, an emplyer will nt be treated as failing t meet the requirements f 6051 fr 2011, and will nt be subject [*17] t any penalties fr failure t meet such requirements, merely because it des nt reprt the aggregate cst f applicable emplyer-spnsred cverage n Frms W-2 fr 2011. Q-5: Hw is the aggregate reprtable cst reprted n Frm W-2? A-5: The aggregate reprtable cst is reprted n Frm W-2 in bx 12, using cde DD. Q-6: What rules apply in the case f cverage prvided by the emplyer t an emplyee fr a perid during a calendar year after that emplyee has terminated emplyment? A-6: An emplyer may apply any reasnable methd f reprting the cst f cverage prvided under a grup health plan fr an emplyee wh terminated emplyment during the calendar year, prvided that the methd is used cnsistently fr all emplyees receiving cverage under that plan wh terminate emplyment during the plan year and cntinue r therwise receive cverage after the terminatin f emplyment. Hwever, regardless f the methd f reprting used by the emplyer fr ther terminated emplyees, an emplyer is nt required t reprt any amunt in bx 12 using Cde DD fr an emplyee wh, pursuant t 31.6051-1 (d) (1) (i), has requested t receive a Frm W-2 befre the end f the calendar year [*18] during which the emplyee terminated emplyment. Example 1. Emplyee is an emplyee f Emplyer n January 1, and cntinues in emplyment thrugh April 25. During that entire perid and thrugh April 30, Emplyee had individual cverage fr himself under a grup health plan with a cst f cverage f $350 per mnth. Emplyee elects cntinuatin cverage fr the six mnths fllwing terminatin f emplyment, cvering the perid May 1 thrugh Octber 31, fr which the Emplyee pays $350 per mnth. Emplyer reprts $1,400 as the reprtable cst under the plan fr the calendar year, cvering the fur mnths during which Emplyee perfrmed services and had cverage as an active emplyee. Emplyer applies this methd cnsistently fr all emplyees terminating during the calendar year wh have cverage under that grup health plan. Emplyer has applied a reasnable methd f reprting Emplyee's reprtable cst under the plan.
Example 2. Same facts as Example 1, except that Emplyer reprts $3,500 as the reprtable cst under the plan fr the calendar year, cvering bth the mnthly perids during which Emplyee perfrmed services and had cverage as an active emplyee, and the mnthly perids [*19] during which Emplyee retained cntinuatin cverage under the plan. Emplyer applies this methd cnsistently fr all emplyees terminating during the calendar year wh retained cverage under that grup health plan. Emplyer has applied a reasnable methd f reprting Emplyee's reprtable cst under the plan. Q-7: In the case f an individual wh is an emplyee f multiple emplyers within a calendar year, must each emplyer prvide a Frm W-2 reprting the aggregate reprtable cst that such emplyer prvided? A-7: Each emplyer prviding emplyer-spnsred cverage must reprt the aggregate reprtable cst f cverage it prvides. Hwever, if the emplyers cncurrently emply an emplyee and are related emplyers within the meaning f 3121 (s) and ne such emplyer is a cmmn paymaster within the meaning f 3121 (s) fr wages paid t an emplyee that is cncurrently emplyed, the cmmn paymaster must include the aggregate reprtable cst f the cverage prvided t that emplyee by all the emplyers fr whm it serves as the cmmn paymaster n the Frm W-2 issued by the cmmn paymaster. In such case, the related emplyers that use the cmmn paymaster and that are nt the [*20] cmmn paymaster must nt reprt the cst f cverage they prvide. If the emplyers are related emplyers within the meaning f 3121 (s) but d nt cmpensate an emplyee that is cncurrently emplyed with a cmmn paymaster, then with respect t that emplyee, the related emplyers may either reprt the entire aggregate reprtable cst n ne f the Frms W-2 prvided t the emplyee, r allcate the aggregate reprtable cst amng the emplyers that cncurrently emply the emplyee using any reasnable methd f allcatin. Fr emplyers participating in a multiemplyer healthcare plan, see Q&A-17. Q-8: In the case f an individual wh transfers t a new emplyer that qualifies as a successr emplyer under 3121 (a) (1), must bth the predecessr and successr emplyers reprt the aggregate reprtable cst f cverage each prvided? A-8: Yes, each f the predecessr and successr emplyers must reprt the aggregate reprtable cst f cverage that that emplyer prvided, unless the successr emplyer fllws the ptinal prcedure in Rev. Prc. 2004-53, 2004-2 C.B. 320, and issues ne Frm W-2 reflecting wages paid t the emplyee during the calendar year by bth the predecessr [*21] emplyer and the successr emplyer. Cnsistent with the rules applicable t reprting f wages, the successr emplyer fllwing the ptinal prcedure must include the aggregate reprtable cst f cverage prvided by bth emplyers n the Frm W-2 that it issues, and the predecessr emplyer must nt reprt the cst f cverage it prvides. Q-9: Must an emplyer issue a Frm W-2 including the aggregate reprtable cst t an individual t whm the emplyer is nt therwise required t issue a Frm W-2, such as a retiree r ther frmer emplyee receiving n cmpensatin required t be reprted n a Frm W-2? A-9: N. An emplyer is nt required t issue a Frm W-2 reprting the aggregate reprtable cst t an individual t whm the emplyer is nt therwise required t issue a Frm W-2. Q-10: Is the ttal f the aggregate reprtable csts attributable t an emplyer's emplyees required t be reprted n Frm W-3, Transmittal f Wage and Tax Statements? A-10: N. The ttal f the aggregate reprtable csts attributable t an emplyer's emplyees is nt required t be reprted n Frm W-3, Transmittal f Wage and Tax Statements.
Aggregate Cst f Applicable Emplyer-Spnsred Cverage (Q&A-11 thrugh Q&A-15) Q-11: [*22] What is the aggregate cst f applicable emplyer-spnsred cverage and hw is the aggregate cst f applicable emplyer-spnsred cverage referred t in this ntice? A-11: The aggregate cst f applicable emplyer-spnsred cverage is the ttal cst f cverage under all applicable emplyer-spnsred cverage (as defined in Q&A-12) prvided t the emplyee. In this ntice, the cst f cverage under a grup health plan is referred t as the reprtable cst and the aggregate cst f applicable emplyer-spnsred cverage is referred t as the aggregate reprtable cst. Q-12: What is applicable emplyer-spnsred cverage? A-12: Applicable emplyer-spnsred cverage means, with respect t any emplyee, cverage under any grup health plan (see Q&A-13) made available t the emplyee by an emplyer that is excludable frm the emplyee's grss incme under 106, r wuld be s excludable if it were emplyer-prvided cverage (within the meaning f such 106), except that applicable emplyer-spnsred cverage des nt include: (1) any cverage fr lng-term care, (2) any cverage (whether thrugh insurance r therwise) described in 9832 (c) (1) (ther than subparagraph (G) theref (cverage [*23] fr n-site medical clinics)), (3) any cverage under a separate plicy, certificate, r cntract f insurance which prvides benefits substantially all f which are fr treatment f the muth (including any rgan r structure within the muth) r fr treatment f the eye, and (4) any cverage described in 9832 (c) (3) the payment fr which is nt excludable frm grss incme and fr which a deductin under 162 (l) is nt allwable. See Q&A-16 thrugh Q&A-23 fr guidance n applicable emplyer-spnsred cverage that is nt required t be included in the aggregate reprtable cst. Q-13: What is a grup health plan? A-13: A grup health plan is a plan (including a self-insured plan) f, r cntributed t by, an emplyer (including a self-emplyed persn) r emplyee rganizatin t prvide health care (directly r therwise) t the emplyees, frmer emplyees, the emplyer, thers assciated r frmerly assciated with the emplyer in a business relatinship, r their families. Until further guidance is issued, fr purpses f identifying whether a specific arrangement is a grup health plan, taxpayers may rely upn a gd faith applicatin f a reasnable interpretatin f the statutry [*24] prvisins and applicable guidance, including 54.4980B-2, Q&A-1. Q-14: Des the aggregate reprtable cst include bth the prtin f the cst paid by the emplyer and the prtin f the cst paid by the emplyee?
A-14: Yes. The aggregate reprtable cst generally includes bth the prtin f the cst paid by the emplyer and the prtin f the cst paid by the emplyee, regardless f whether the emplyee paid fr that cst thrugh pre-tax r after-tax cntributins. Hwever, see Q&A-19 regarding cntributins t a health FSA. Q-15: Des the aggregate reprtable cst include any prtin f the cst f cverage under an emplyer-spnsred grup health plan that is includible in the emplyee's grss incme, fr example, the cst f cverage fr a persn ther than an emplyee, the spuse f the emplyee, a dependent f the emplyee, r a child f the emplyee (prvided that child will nt have attained age 27 by the end f the taxable year)? A-15: Yes. The aggregate reprtable cst includes the cst f cverage under the emplyerspnsred grup health plan f the emplyee and any persn cvered by the plan because f a relatinship t the emplyee, including any prtin f the cst that [*25] is includible in an emplyee's grss incme. Thus, the aggregate reprtable cst is nt reduced by the amunt f the cst f cverage included in the emplyee's grss incme. Fr the treatment f cverage included in grss incme under 105 (h), r payments r reimbursements f health insurance premiums fr a 2% sharehlder-emplyee f an S crpratin wh is required t include the premium payments in grss incme, see Q&A-23. Example. An emplyee has family health cverage under an emplyer-spnsred grup health plan fr himself, his spuse and dependents, and an adult child age 28, with a cst f cverage f $15,000. The fair market value f the health cverage fr the adult child age 28 is included in the incme and wages f the emplyee. The aggregate reprtable cst with respect t the family health cverage is $15,000. Cst f Cverage Required t be Included in the Aggregate Reprtable Cst (Q&A-16 thrugh Q&A-23) Q-16: Is the cst f cverage under all applicable emplyer-spnsred cverage required t be included in the aggregate reprtable cst? A-16: Except as prvided in this Q&A and in Q&A-17 thrugh Q&A-23, the cst f cverage under all applicable emplyer-spnsred cverage [*26] must be included in the aggregate reprtable cst. Hwever, the fllwing amunts are nt included in the aggregate reprtable cst and are nt reprted under 6051 (a) (14) 1: (1) the amunt cntributed t any Archer MSA (as defined in 220 (d)), (2) the amunt cntributed t any Health Savings Accunt (as defined in 223 (d)), and (3) the amunt f any salary reductin electin t a health Flexible Spending Arrangement (FSA) (within the meaning f 106 (c) (2) and 125). Q-17: Is the cst f cverage under a multiemplyer plan (as defined in 54.4980B-2, Q&A- 3) required t be included in the aggregate reprtable cst reprted n Frm W-2? A-17: N. An emplyer that cntributes t a multiemplyer plan is nt required t include the cst f cverage prvided t an emplyee under that multiemplyer plan in determining the
aggregate reprtable cst. If the nly applicable emplyer-spnsred cverage prvided t an emplyee is prvided under a multiemplyer plan, the emplyer is nt required t reprt any amunt under 6051 (a) (14) n the Frm W-2 fr that emplyee. Q-18: Is the cst f cverage under a Health Reimbursement Arrangement (HRA) required t be included in the aggregate reprtable [*27] cst reprted n Frm W-2? A-18: N. An emplyer is nt required t include the cst f cverage under an HRA in determining the aggregate reprtable cst. If the nly applicable emplyer-spnsred cverage prvided t an emplyee is an HRA, the emplyer is nt required t reprt any amunt under 6051 (a) (14) n the Frm W-2 fr that emplyee. Q-19: If an emplyer ffers a health FSA thrugh a 125 cafeteria plan, is the amunt f the health FSA required t be included in the aggregate reprtable cst reprted n Frm W-2? A-19: Yes, the amunt f the health FSA is required t be included in the aggregate reprtable cst reprted n Frm W-2, but nly if the amunt f the health FSA fr the plan year exceeds the salary reductin elected by the emplyee fr the plan year. The amunt f a health FSA fr a cafeteria plan year equals the amunt f salary reductin (as defined in Prpsed Treas. Reg. 1.125-1 (r)) elected by the emplyee fr the plan year, plus the amunt f any ptinal emplyer flex credits (as defined under Prpsed Treas. Reg. 1.125-5 (b)) that the emplyee elects t apply t the health FSA. In determining the aggregate reprtable cst, the amunt f the health FSA [*28] is reduced (but nt belw zer) by the emplyee's salary reductin electin (see Q&A-16). If the amunt f salary reductin (fr all qualified benefits) elected by an emplyee equals r exceeds the amunt f the health FSA fr the plan year, the emplyer des nt include the amunt f the health FSA fr that emplyee in the aggregate reprtable cst. Hwever, if the amunt f the health FSA fr the plan year exceeds the salary reductin elected by the emplyee fr the plan year, then the amunt f that emplyee's health FSA minus the emplyee's salary reductin electin fr the health FSA must be included in the aggregate reprtable cst and reprted under 6051 (a) (14). Fr purpses f this Q&A-19, a health FSA means an FSA (as defined in Prpsed Treas. Reg. 1.125-5 (a)) that is a medical reimbursement arrangement. Example 1: Emplyer maintains a 125 cafeteria plan that ffers permitted taxable benefits (including cash) and qualified nntaxable benefits (including a health FSA). The plan permits cntributins nly thrugh emplyee salary reductin electins, and des nt ffer any emplyer flex credits. Emplyee makes a $2,000 salary reductin electin fr several qualified benefits [*29] under the plan, including a health FSA fr $1,500. Fr purpses f reprting n Frm W- 2, nne f the health FSA amunt is included fr purpses f determining the aggregate reprtable cst. Example 2: Emplyer maintains a 125 cafeteria plan that ffers permitted taxable benefits (including cash) and qualified nntaxable benefits (including a health FSA). The plan ffers an emplyer flex credit f $1,000. Emplyee makes a $2,000 salary reductin electin fr several qualified benefits under the plan, including a health FSA fr $1,500. The cst f the qualified benefits fr Emplyee under the plan fr the year is $3,000. The amunt f Emplyee's salary reductin electin ($2,000) fr the plan year equals r exceeds the amunt f the health FSA ($1,500) fr the plan year. Thus, fr purpses f reprting n Frm W-2, nne f the health FSA amunt is permitted t be included fr purpses f determining the aggregate reprtable cst.
Example 3: Emplyer maintains a 125 cafeteria plan that ffers permitted taxable benefits (including cash) and qualified nntaxable benefits (including a health FSA). The plan ffers a flex credit in the frm f a match f each emplyee's salary reductin [*30] cntributin. Emplyee makes a $700 salary reductin electin fr a health FSA. Emplyer prvides an additinal $700 t the health FSA t match Emplyee's salary reductin electin. The amunt f the health FSA fr Emplyee fr the plan year is $1,400. The amunt f Emplyee's health FSA ($1,400) fr the plan year exceeds the salary reductin electin ($700) fr the plan year. The emplyer must include $700 ($1,400 health FSA amunt minus $700 salary reductin) in determining the aggregate reprtable cst. Q-20: Is the cst f cverage under a dental plan r a visin plan included in the aggregate reprtable cst if that plan satisfies the requirements fr being excepted benefits fr purpses f HIPAA under 54.9831-1 (c) (3)? A-20: N. An emplyer is nt required t include the cst f cverage under a dental plan r a visin plan if the plan satisfies the requirements fr being excepted benefits fr purpses f HIPAA under 54.9831-1 (c) (3). (Generally, t be excepted benefits fr purpses f HIPAA under 54.9831-1 (c) (3), the dental r visin benefits must either (1) be ffered under a separate plicy, certificate, r cntract f insurance (that is, nt ffered under the same plicy, [*31] certificate, r cntract f insurance under which majr medical r ther health benefits are ffered) r (2) participants must have the right nt t elect the dental r visin benefits and if they d elect the dental r visin benefits they must pay an additinal premium r cntributin fr that cverage.) An emplyer must include the cst f cverage under a dental plan r a visin plan if the plan des nt satisfy the requirements fr being excepted benefits fr purpses f HIPAA under 54.9831-1 (c) (3). Q-21: Is the cst f cverage prvided under a self-insured grup health plan that is nt subject t any federal cntinuatin cverage requirements (fr example, a church plan within the meaning f 4980B (d) (3) that is a self-insured grup health plan) required t be included in the aggregate reprtable cst reprted n Frm W-2? A-21: N. An emplyer is nt required t include in the aggregate reprtable cst the cst f cverage prvided under a self-insured grup health plan that is nt subject t any federal cntinuatin cverage requirements. If the nly grup health plan cverage prvided t an emplyee by the emplyer is prvided under a self-insured grup health plan that [*32] is nt subject t any federal cntinuatin cverage requirements, the emplyer is nt required t reprt any amunt under 6051 (a) (14) n the Frm W-2 fr that emplyee. Emplyers wh prvide cverage under a self-insured grup health plan that is subject t Federal cntinuatin cverage requirements must reprt the cst f cverage n Frm W-2. Fr this purpse, federal cntinuatin cverage requirements include the COBRA requirements under the Cde, the Emplyee Retirement Incme Security Act f 1974, r the Public Health Service Act and the temprary cntinuatin cverage requirement under the Federal Emplyees Health Benefits Prgram. Q-22: Is the cst f cverage prvided by the Gvernment f the United States, the gvernment f any State r plitical subdivisin theref, r any agency r instrumentality f any such gvernment, under a plan maintained primarily fr members f the military r fr members f the military and their families, required t be included in the aggregate reprtable cst reprted n Frm W-2? A-22: N. The cst f cverage prvided by the Gvernment f the United States, the gvernment f any State r plitical subdivisin theref, r any agency r instrumentality [*33]
f any such gvernment, under a plan maintained primarily fr members f the military r fr members f the military and their families, is nt required t be included in the aggregate reprtable cst reprted n Frm W-2 Q-23: In determining the aggregate reprtable cst, hw shuld an emplyer treat an excess reimbursement f a highly cmpensated individual that is included in grss incme under 105 (h), r payments r reimbursements f health insurance premiums fr a 2% sharehlderemplyee f an S crpratin wh is required t include the premium payments in grss incme? A-23: The cst f applicable emplyer-spnsred cverage des nt include excess reimbursements f highly cmpensated individuals that are included in grss incme under 105 (h); that is, an excess reimbursement that is included in incme is subtracted frm the cst f cverage in determining the aggregate reprtable cst. Similarly, the cst f applicable emplyer-spnsred cverage des nt include the cst f cverage taken int incme as the result f an emplyee being a 2% sharehlder-emplyee f an emplyer that is an S crpratin. Fr mre infrmatin regarding the treatment f the emplyer payment [*34] r reimbursement f health insurance premiums fr a 2% sharehlder-emplyee, see Ntice 2008-1, 2008-1 C.B. 251. Example: Emplyer prvides self-insured health cverage with a cst f cverage f $12,000 under which a highly cmpensated individual receives a $4,000 excess reimbursement. As a result, under 105 (h), that individual must include the $4,000 excess reimbursement in grss incme. The excess reimbursement is nt included in the determinatin f the aggregate reprtable cst, s that Emplyer must include $8,000 as the cst f cverage under the plan in determining the aggregate reprtable cst fr that individual. Methds f Calculating the Cst f Cverage (Q&A-24 thrugh Q&A-27) Q-24: Hw may an emplyer calculate the reprtable cst under a plan? A-24: An emplyer may calculate the reprtable cst under a plan using the COBRA applicable premium methd (Q&A-25). Alternatively, (1) an emplyer that is determining the cst f cverage fr an emplyee cvered by the emplyer's insured plan may calculate the reprtable cst using the premium charged methd (Q&A-26); and (2) an emplyer that subsidizes the cst f cverage r that determines the cst f cverage fr a year by [*35] applying the cst f cverage in a prir year may calculate the reprtable cst using the mdified COBRA premium methd (Q&A-27). Fr emplyers that charge emplyees a cmpsite rate (the same premium fr different types f cverage under a plan, fr example, a premium fr selfnly cverage versus family cverage), see Q&A-28. The reprtable cst fr an emplyee receiving cverage under the plan is the sum f the reprtable csts fr each perid (such as a mnth) during the year as determined under the methd used by the emplyer. An emplyer is nt required t use the same methd fr every plan, but must use the same methd with respect t a plan fr every emplyee receiving cverage under that plan. Q-25: Hw des an emplyer calculate the reprtable cst fr a perid under the COBRA applicable premium methd? A-25: Under the COBRA applicable premium methd, the reprtable cst fr a perid equals the COBRA applicable premium fr that cverage fr that perid. If the emplyer applies this methd, the emplyer must calculate the COBRA applicable premium in a manner that satisfies the requirements under 4980B (f) (4). Under current guidance, the COBRA applicable premium calculatin [*36] wuld meet these requirements if the emplyer made such
calculatin in gd faith cmpliance with a reasnable interpretatin f the statutry requirements under 4980B (see 54.4980B-1, Q&A-2). Q-26: Hw des an emplyer calculate the reprtable cst fr a perid under the premium charged methd? A-26: The premium charged methd may be used t determine the reprtable cst nly fr an emplyee cvered by an emplyer's insured grup health plan. In such a case, if the emplyer applies this methd, the emplyer must use the premium charged by the insurer fr that emplyee's cverage (fr example, fr self-nly cverage r fr family cverage, as applicable t the emplyee) fr each perid as the reprtable cst fr that perid. Q-27: Hw des an emplyer calculate the reprtable cst fr a perid under the mdified COBRA premium methd? A-27: An emplyer may use the mdified COBRA premium methd with respect t a plan nly where it subsidizes the cst f COBRA (s that the premium charged t COBRA qualified beneficiaries is less than the COBRA applicable premium) r where the actual premium charged by the emplyer t COBRA qualified beneficiaries fr each perid in the current year is [*37] equal t the COBRA applicable premium fr each perid in a prir year. If the emplyer subsidizes the cst f COBRA, the emplyer may determine the reprtable cst fr a perid based upn a reasnable gd faith estimate f the COBRA applicable premium fr that perid, if such reasnable gd faith estimate is used as the basis fr determining the subsidized COBRA premium. If the actual premium charged by the emplyer t COBRA qualified beneficiaries fr each perid in the current year is equal t the COBRA applicable premium fr each perid in a prir year, the emplyer may use the COBRA applicable premium fr each perid in the prir year as the reprtable cst fr each perid in the current year. Example 1: Fr the calendar year 2012, Emplyer A subsidizes 50% f a reasnable gd faith estimate f the COBRA applicable premium. Emplyer A's reasnable gd faith estimate f the COBRA applicable premium fr self-nly cverage fr each mnth in 2012 is $300. Accrdingly, the actual COBRA premium Emplyer A charges individuals eligible fr COBRA cntinuatin cverage electing self-nly cverage is $150 per mnth. Slely fr purpses f 6051 (a) (14) reprting, if Emplyer A uses the [*38] mdified COBRA premium methd, it must treat $300 per mnth (the reasnable gd faith estimate f the COBRA applicable premium) as the mnthly reprtable cst fr self-nly cverage fr the calendar year 2012. Example 2: Emplyer B determined that the COBRA applicable premium fr each mnth in calendar year 2011 fr individuals eligible fr COBRA cntinuatin cverage electing self-nly cverage wuld be $350 per mnth, and charged an actual COBRA premium fr such cverage f $357 per mnth ($350 x 102%). Emplyer B knws that the cst f cverage fr 2012 is nt less than the COBRA applicable premium fr 2011 and decides nt t make a new determinatin f the COBRA applicable premium fr the calendar year 2012 but rather t cntinue t charge an actual COBRA premium fr self-nly cverage f $357 per mnth ($350 x 102%). Slely fr purpses f 6051 (a) (14) reprting, if Emplyer B uses the mdified COBRA premium methd, it must treat $350 per mnth ($357 charged - $7 increase permissible under COBRA) as the mnthly reprtable cst fr self-nly cverage fr the calendar year 2012. Example 3: Emplyer C makes a gd faith estimate f the COBRA applicable premium fr the calendar [*39] year 2012 fr individuals eligible fr COBRA cntinuatin cverage electing self-nly cverage f $500 per mnth. T ensure cmpliance with the COBRA requirements despite nt calculating a precise COBRA applicable premium, Emplyer C charges an actual COBRA premium f $350 per mnth fr individuals eligible fr COBRA cverage
electing self-nly cverage. Slely fr purpses f 6051 (a) (14) reprting, if Emplyer C uses the mdified COBRA premium methd, it must treat $500 per mnth as the mnthly reprtable cst fr self-nly cverage fr the calendar year 2012. Other Issues Relating t Calculating the Cst f Cverage (Q&A-28 thrugh Q&A-31) Q-28: Hw may an emplyer charging an emplyee a cmpsite rate calculate the reprtable cst fr a perid? A-28: An emplyer is cnsidered t charge emplyees a cmpsite rate if (1) there is a single cverage class under the plan (that is, if an emplyee elects cverage, all individuals eligible fr cverage under the plan because f their relatinship t the emplyee are included in the electins and n greater amunt is charged t the emplyee regardless f whether the cverage will include nly the emplyee r the emplyee plus ther such [*40] individuals), r (2) there are different types f cverage under a plan (fr example, self-nly cverage and family cverage, r self-plus-ne cverage and family cverage) and emplyees are charged the same premium fr each type f cverage. In such a case, the emplyer using a cmpsite rate may calculate and use the same reprtable cst fr a perid fr (1) the single class f cverage under the plan, r (2) all the different types f cverage under the plan fr which the same premium is charged t emplyees, prvided this methd is applied t all types f cverage prvided under the plan. Fr example, if a plan charges ne premium fr either self-nly cverage, r self-and-spuse cverage (the first cverage grup), and als charges ne premium fr family cverage regardless f the number f family members cvered (the secnd cverage grup), an emplyer may calculate and reprt the same reprtable cst fr all f the cverage prvided in the first cverage grup, and the same reprtable cst fr all f the cverage prvided in the secnd cverage grup. In such a case, the reprtable csts under the plan must be determined under ne f the methds described in Q&A-25 thrugh Q&A-27 [*41] fr which the emplyer is eligible. If an emplyer is using a cmpsite rate fr active emplyees, but is nt using a cmpsite rate fr determining applicable COBRA premiums fr qualifying beneficiaries, the emplyer may use either the cmpsite rate r the applicable COBRA premium fr determining the aggregate cst f cverage, prvided that the same methd is used cnsistently fr all active emplyees and is used cnsistently fr all qualifying beneficiaries receiving COBRA cverage. Q-29: If the reprtable cst fr a perid changes during the year, must the reprtable cst under the plan fr the year fr an emplyee reflect the increase r decrease? A-29: If the cst fr a perid changes during the year (fr example, under the COBRA applicable premium methd because the 12-mnth perid fr determining the COBRA applicable premium is nt the calendar year), the reprtable cst under the plan fr an emplyee fr the year must reflect the increase r decrease fr the perids t which the increase r decrease applies. Fr examples f the applicatin f this rule, see Q&A-30. Q-30: Hw is the reprtable cst under a plan calculated if an emplyee cmmences, changes r terminates cverage [*42] during the year? A-30: If an emplyee changes cverage during the year, the reprtable cst under the plan fr the emplyee fr the year must take int accunt the change in cverage by reflecting the different reprtable csts fr the cverage elected by the emplyee fr the perids fr which such cverage is elected. If the change in cverage ccurs during a perid (fr example, in the middle f a mnth where csts are determined n a mnthly basis), an emplyer may use any reasnable
methd t determine the reprtable cst fr such perid, such as using the reprtable cst at the beginning f the perid r at the end f the perid, r averaging r prrating the reprtable csts, prvided that the same methd is used fr all emplyees with cverage under that plan. Similarly, if an emplyee cmmences cverage r terminates cverage during a perid, an emplyer may use any reasnable methd t calculate the reprtable cst fr that perid, prvided that the same methd is used fr all emplyees with cverage under the plan. The fllwing examples illustrate the principles set frth in Q&A-29 and Q&A-30: Example 1: Emplyer determines that the mnthly reprtable cst under a grup health [*43] plan fr self-nly cverage fr the calendar year 2012 is $500. Emplyee is emplyed by emplyer fr the entire calendar year 2012, and had selfnly cverage under the grup health plan fr the entire year. Fr purpses f reprting fr the 2012 calendar year, Emplyer must treat the 2012 reprtable cst under the plan fr Emplyee as $6,000 ($500 x 12). Example 2: Emplyer determines that the mnthly reprtable cst under a grup health plan fr self-nly cverage fr the perid Octber 1, 2011 thrugh September 30, 2012 is $500, and that the mnthly reprtable cst under a grup health plan fr self-nly cverage fr the perid Octber 1, 2012 thrugh September 30, 2013 is $520. Emplyee is emplyed by emplyer fr the entire calendar year 2012 and had self-nly cverage under the grup health plan fr the entire year. Fr purpses f reprting fr the 2012 calendar year, Emplyer must treat the 2012 reprtable cst under the plan fr Emplyee as $6,060 (($500 x 9) + ($520 x 3)). Example 3: Emplyer determines that the mnthly reprtable cst under a grup health plan fr self-nly cverage fr the calendar year 2012 is $500, and that the mnthly reprtable cst under the same grup [*44] health plan fr self-plusspuse cverage fr the calendar year 2012 is $1,000. Emplyee is emplyed by Emplyer fr the entire calendar year 2012. Emplyee had self-nly cverage under the grup health plan frm January 1, 2012 thrugh June 30, 2012, and then had self-plus-spuse cverage frm July 1, 2012 thrugh December 31, 2012. Fr purpses f reprting fr the 2012 calendar year, Emplyer must treat the 2012 reprtable cst under the plan fr Emplyee as $9,000 (($500 x 6) + ($1,000 x 6)). Example 4: Emplyer determines that the mnthly reprtable cst under a grup health plan fr self-nly cverage fr the calendar year 2012 is $500. Emplyee cmmences emplyment and self-nly cverage under the grup health plan n March 14, 2012, and cntinues emplyment and self-nly cverage thrugh the remainder f the calendar year. Fr purpses f reprting fr the 2012 calendar year, Emplyer treats the cst f cverage under the plan fr Emplyee fr March 2012 as $250 ($500 x 1/2). Because Emplyer's methd f calculating the reprtable cst f under the plan fr March 2012 by prrating the reprtable cst fr March 2012 t reflect Emplyee's date f cmmencement f cverage is reasnable, [*45]
Emplyer must treat the 2012 reprtable cst under the plan fr Emplyee as $4,750 (($500 x 1/2) + ($500 x 9)). Q-31: If an emplyer has used a 12-mnth determinatin perid that is nt the calendar year fr purpses f applying the COBRA applicable premium under a plan, may the emplyer als use that 12-mnth determinatin perid fr purpses f calculating the reprtable cst fr the year under the plan? A-31: N. The reprtable cst under a plan must be determined n a calendar year basis. Fr rules n translating the COBRA applicable premium t a calendar year amunt, see Q&A-29 and Q&A-30. Additinal Issues Q-32: Is the cst f cverage prvided under an emplyee assistance prgram (EAP), wellness prgram, r n-site medical clinic required t be included in the aggregate reprtable cst reprted n Frm W-2? A-32: Cverage prvided under an EAP, wellness prgram, r n-site medical clinic is nly includible in the aggregate reprtable cst t the extent that the cverage is prvided under a prgram that is a grup health plan fr purpses f 5000 (b) (1). An emplyer is nt required t include the cst f cverage prvided under an EAP, wellness prgram, r n-site medical clinic [*46] that therwise wuld be required t be included in the aggregate reprtable cst reprted n Frm W-2 because it cnstitutes applicable emplyer-spnsred cverage, if that emplyer des nt charge a premium with respect t that type f cverage prvided t a beneficiary qualifying fr cverage in accrdance with any applicable federal cntinuatin cverage requirements. If an emplyer charges a premium with respect t that type f cverage prvided t a beneficiary qualifying fr cverage in accrdance with any applicable federal cntinuatin cverage requirements, that emplyer is required t include the cst f that type f cverage prvided. An emplyer that is nt subject t any federal cntinuatin cverage requirements is nt required t include the cst f cverage prvided under an EAP, wellness prgram, r n-site medical clinic. Fr this purpse, federal cntinuatin cverage requirements include the COBRA requirements under the Cde, the Emplyee Retirement Incme Security Act f 1974, r the Public Health Service Act and the temprary cntinuatin cverage requirement under the Federal Emplyees Health Benefits Prgram. Q-33: Are there circumstances in which an emplyer [*47] may include in the aggregate reprtable cst reprted n Frm W-2 the cst f cverage that is nt required t be included in the aggregate reprtable cst under applicable interim relief? A-33: Yes. An emplyer may include in the aggregate reprtable cst the cst f cverage that is nt required t be included in the aggregate reprtable cst under applicable interim relief, such as the cst f cverage under a Health Reimbursement Accunt (HRA), a multi-emplyer plan, an EAP, wellness prgram, r n-site medical clinic, prvided that the calculatin f the cst f cverage therwise meets the requirements f Q&A-24 thrugh Q&A-27, and prvided that such cverage cnstitutes applicable emplyer-spnsred cverage. Q-34: Hw may an emplyer calculate the reprtable cst under a prgram prviding benefits that cnstitute applicable emplyer-spnsred cverage and ther benefits that d nt cnstitute applicable emplyer-spnsred cverage, such as a lng-term disability prgram that als prvides certain health care benefits? A-34: Fr a prgram under which an emplyee receives benefits that cnstitute applicable emplyer-spnsred cverage and ther benefits that d nt cnstitute applicable [*48]