How to Report Employer-Sponsored Health Care Coverage on the W-2 Form in Sage 100

Staying compliant with the Affordable Care Act (ACA) is a priority for employers across the United States. Among the multitude of obligations imposed by this landmark legislation, one often misunderstood aspect is the requirement for employers to report the cost of health coverage under their employer-sponsored group health plans.

It's crucial to clarify that this reporting does not make the coverage taxable. The value of the employer’s excludable contribution to health coverage continues to be excludable from an employee's income. This reporting is for informational purposes only and will provide employees useful and comparable consumer information on the cost of their health care coverage.

For more details, please visit the IRS website, Form W-2 Reporting of Employer-Sponsored Health Coverage.

In this blog article, we describe the details of employer contributions and reporting under the ACA on the W2 form in Sage 100.

Create an Employer Contribution deduction:

1. Open Payroll, Setup, Deduction Code Maintenance

2. Create a new deduction code

3. From the Deduction Type drop-down menu, select Employer Contribution

4. If applicable, enter DD in the Box 12 Code field.

5. Enter or select the remaining applicable fields and click Accept

Assign the Employer Contribution to employees:

1. Open Payroll, Main, Employee Maintenance

2. Select the applicable Employee No

3. Click the Deductions button

4. Select the Ded Code created above

5. Enter the pre-payroll contribution amount in the Ded Rate field

6. If applicable, check Automatic check box and click OK.

Note: If adding these amounts at the end of the year, populate the Month Amount fields with the appropriate amounts so that total at bottom equals YTD contribution amount.

7. Click Accept twice

8. Repeat Steps 1-7 for all applicable employees

Note: Once setup, the Box 12 codes will automatically print on W-2 forms. If two or more deduction codes use the same Box 12 code, the amounts will be added together & the total amount will print on W-2 form.

Should you have any questions about reporting on W-2s using Sage 100 or need other support with managing your Sage 100, we sre at your service. Ardent Consulting’s team of experts is ready and eager to help you navigate your system challenges and optimize your business's potential. We prioritize your business’s health and are committed to supporting your journey every step of the way.