Disability Pay on a W-2 by the insurance company?

I have no confirmation yet, but here's what has been communicated to me. I've asked for additional details.

Employee is out on disability. Has not terminated employment. Employer pays disability premiums, disability payments are made to the employer, who in turn pays them to the disabled employee. This would normally be considered compensation for plan purposes, as the plan uses W-2 and does not exclude disability payments. So far, so good.

What I'm being told is that the insurance company is issuing the W-2. Do (some) insurance companies perhaps do this as a "service" and issue a W-2 in the name of the employer, using the employer's id #? Anyone have experience with such a situation?

Yes, I think we've run into that as well. I did a quick google and found this Q&A from Guardian. Some other sites had similar type of info. Apparently, the insurer can provide the W2 (if negotiated/policy provides) or otherwise must provide the necessary info to the employer for proper payroll reporting and issuing W2s.

https://guardianlife.custhelp.com/app/answers/answer_view/a_id/69/~/do-i-receive-a-w-2-form-for-disability-claim-payments%3F

If the disability plan is fully insured, Guardian issues a W-2 and makes the tax deposits using their tax ID #.  If the plan is self-funded, the W-2 is issued by the employer.

Thanks.

On 8/11/2022 at 3:39 PM, Dare Johnson said:

If the disability plan is fully insured, Guardian issues a W-2 and makes the tax deposits using their tax ID #.  If the plan is self-funded, the W-2 is issued by the employer.

Most employers self-fund short-term disability, but I think the post here is probably regarding LTD. I wouldn't suggest self-funding LTD. Someone could become severely disabled early in their career and be on LTD for rest of life. Things happen to employers over such long periods.

Hi Luke - yes, this is LTD.