New W-2 Reporting Requirement and San Francisco Health Care Ordinance

[Guest Gail P S]

I have a client who makes health care contributions on behalf of its employees to the City of San Francisco under the City's health care ordinance. The contributions are allocated by the City for each employee to either Healthy San Francisco or a medical reimbursement account, depending on the employee's eligibility for Healthy San Francisco. The contributions for the fourth quarter 2012 are not due until January of 2013 (and the employer won't have sufficient data to determine the contribution until early January).

I am trying to determine whether the employer must include these contributions as part of the new W-2 PPACA reporting requirement. Also, if these contributions are reportable, are the 4th quarter contributions reported on the 2012 W-2 since the employer will not actually pay the contributions until January 2013 (and will not have calculated the contribution amount until January 2013)?

My initial thought is that these contributions would have to be included under Q&A 13 of Notice 2012-9 since the definition of GHP includes a plan of (or contributions made by) an employer for the purpose of providing health care. However, there is an exemption under Notice 2012-9 for coverage under a health reimbursement account (which may eliminate any need to require reporting for employees in the medical reimbursement account option). Also, all the IRS examples address the cost of coverage for each period during the calendar year (and there are no references to when the premium or amount was actually paid).

Has anyone dealt with these issues? Thanks