W-2 Reporting of Health Coverage Cost

Employers filing 250+ W-2s in prior year must report the aggregate cost of employer-sponsored health coverage in Box 12 (Code DD). Informational only - does not make coverage taxable. Small employers (<250 W-2s) currently exempt. Note for ICHRA employers: W-2 reporting includes the employer's ICHRA contributions in Box 12, Code DD.

Current Fee / Rate Information

Reported in Box 12, Code DD of Form W-2. Informational only — not taxable to employees. Required for employers filing 250+ W-2s in the prior year. Includes employer and employee contributions.

Last reviewed: July 2026

Non-Compliance Penalties

Standard W-2 penalties apply: $60 per W-2 if corrected within 30 days, $120 if corrected by August 1, $310 thereafter (2024). Max $3,783,500.

What goes in Box 12, Code DD?

The total cost of each employee's employer-sponsored health coverage: employer share plus employee share, combined. It's informational only. Nothing about it makes the coverage taxable. The point is showing employees what their coverage actually costs, a number most of them underestimate badly.

Who has to report?

Employers that filed 250 or more W-2s in the prior year. Smaller employers stay exempt under IRS transition relief until the IRS says otherwise. If you sponsor an ICHRA, your ICHRA contributions belong in the Code DD number too.

What counts, what doesn't

• In: major medical premiums (both shares), and employer flex credits toward health coverage.
• Out: employee health FSA salary reductions, HSA contributions, and standalone dental or vision coverage.

The practical work is a year-end data pull: payroll needs coverage-by-month data from your ben admin system. Reconcile it in December, not on January 30.

Related Reading

• What It Actually Costs to Keep Part-Time Workers Off Your Health Plan→
• Hiding in Your Pharmacy Costs: DIR Fees No One Ever Sees→
• Your Employees Think Their Benefits Cost $200 a Month. The Real Number Is Closer to $1,700.→