Whoa! What’s that new line item on my W-2? Is that taxable?
Employers are starting to field questions like these from their employees. That’s because employees are having their eyes opened to the actual cost of their employer-provided health care benefits.
Some employees have seen the value of these benefits before in company-wide communications or total compensation statements. Now, as part of the Affordable Care Act, all employees are seeing what their employers pay for their health care coverage.
It’s easy to understand why employees are shocked. they’ve been as removed from the cost of health care as most of us — including doctors and other providers.
Focusing employees on health care costs
Fixing at least part of this problem is behind the federal government’s W-2 reporting requirement. The reporting is intended to provide comparable information on the cost of employees’ health care coverage. While this will become particularly useful later, when health exchanges are available, the inclusion of this figure affords employers a unique communication opportunity today.
Health care facts and figures are an important part of the conversation employers are having with employees about their health and well-being. I’ve shared this opinion before. Educating employees about health care costs and how they directly impact salary, bonuses, premiums and business performance is a fundamental way to help employees understand what’s at stake.
An opportunity to have a conversation
It makes employees a part of the solution, not a part of the problem. It treats them like the health care consumers employers want them to be. And, it only increases the loyalty and related engagement level this good value delivers.
Employers who have shied away from this conversation before have a perfect opportunity to step up to the plate and put this ball in play.
PS –– Here are two more useful IRS documents to draw from: