In addition to "relief" from an excise tax penalty and filing of Form 8928 through June 30, 2015, many benefits advisers are suggesting that employers who did report additional salary in lieu of providing health insurance benefits may now consider filing "corrected" W2s. This would mean treating 2014 premiums as non-taxable (as previously practiced for Employer Payment Plans, EPPs, under the long-standing arrangement described in the 1961 IRS Revenue Ruling 61-146).
IRS Notice 2015-17 does not appear to directly address the taxability concern, but puts forth transitional relief for the excise tax imposition on EPPs that did not comply with the Affordable Care Act (ACA). Opinions of legal counsel now indicate that the relief may be consequently considered to extend to reporting of taxable income. As a result, an employer may choose to amend 2014 Forms W-2 to remove additional salary reported for this purpose. In addition, any EPP premium payments paid before June 30, 2015, need not be reported on 2015 Form W-2.
It should be noted that the payment of EPP premiums is still considered to be non-compliant with the ACA. The recent ruling provides a limited exception expiring June 30, 2015.
