Although 2012 was the first time payroll had to report the value of health insurance benefits on Form W-2 under the Affordable Care Act, it is not the first time an insurance benefit has had to be reported by payroll.
In recent years payroll has been required to determine taxation and reporting requirements for health insurance programs such as HSAs, HRAs, and MSAs. Since the 1980s payroll has had to determine the taxation and reporting of group term life insurance as well.
But insurance benefits are not limited to just health or group life. Many companies offer executives other types of life insurance, how does payroll handle those benefits? What about third-party sick pay? Which amounts are taxable and reportable or just reportable? Who is responsible for the Form W-2 for 2020 when the third party sick pay payments are included?
