Does insurance still need to be reported on Forms W-2 if a section 125 is in place?
Whether group health insurance premiums are deducted from an employee’s pay on a pretax or post-tax basis does not affect whether it needs to be reported on the Form W-2. According to the new Health Care Reform law, the combined cost of employer-sponsored health coverage must be included on the employee’s Form W-2. This combined cost specifically excludes salary reduction contributions under a section 125 health FSA, not the premiums under the premium portion of the section 125.
