Out with the old, in with the new W-2

Over the next week or so, employees will receive their annual W-2 forms. I’m always surprised in see the lump sums that I both earn and pay in taxes — one number always seems larger than it should be and one seems smaller. (Guess which is which.)

Come next January, I’ll have a third number to ponder over, thanks to the Patient Protection and Affordable Care Act. As you know, for tax year 2011, PPACA requires employers to report the aggregate cost of health coverage on employees’ W-2s, provided to workers by Jan. 31, 2012.

When the IRS released instructions for reporting the information — where to report the number (Box 12), the code to use (DD), stating the reported amount isn’t taxable and so forth — the agency left out one teensy little detail:  how employers are supposed to calculate the amount spent! Duh.

What did they think employers were gonna use? A pair of dice and a magic 8 ball? Sigh.

So, short of actual government guidance, I ask you: How do you plan to calculate the cost of what your company spends to provide health care benefits to each individual employee and their families? Share your thoughts in the comments.