ACA W-2 and SBC Reporting: FSA Focus

There are a number of Healthcare Reform requirements for plans with employer contributions to a health Flexible Spending Account (FSA) including:

  • Employers must report the total cost of any group health coverage provided to employees if they prepared 250 or more W-2s for tax year 2018. The cost is not taxable. Employer contributions to health FSAs are required to be included in W-2 Box 12, Code DD.
  • Employers must distribute a Summary of Benefits and Coverage (SBC) at open enrollment for most of their group health plans. If the plans include a health FSA as non-excepted benefits, the requirement to submit an additional SBC may be met by referring to the health FSA benefit in the SBC where applicable. There are some conditions  that define a Health FSA as an excepted benefit including:
    • You offer other group health coverage and
    • You do not offer employer contributions greater than $500 to any employee that is not a dollar for dollar match.

If the conditions above are not met, your plan is considered a non-excepted Health FSA plan, which is subject to the SBC requirement.

Click here to learn more about W-2 reporting requirements from the IRS.

Click here for information from CMS about SBC requirements.

Click here for information from the DOL about SBC requirements.

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