(Washington, DC) –Today, U.S. Senator Dean Heller (R-NV) and three Senate colleagues sent a letter to Secretary Timothy Geithner, asking that the IRS postpone a requirement to force employers to report the cost of employees’ health care coverage on W-2 forms until 2018.  This information is required for calculation of the “Cadillac tax” on health insurance plans, which is not effective until 2018.

“This portion of the new health care law will force employers to incur more costs as they calculate their benefits and address the administrative demands of additional reporting. At a time when businesses are already struggling to keep their current employees and hire more, the Administration should not be imposing another burdensome regulation,” said Senator Heller.

Senators Scott Brown (R-MA), Saxby Chambliss (R-GA) and Johnny Isakson (R-GA) co-signed the letter.

The letter follows bi-partisan efforts to repeal the 1099 reporting requirement earlier this year.

Full text of the letter below:

August 8, 2011 

The Honorable Timothy Geithner
Secretary, U.S. Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220

Dear Secretary Geithner,

We write to urge the Internal Revenue Service (IRS) to delay implementation of Section 9002 of Public Law 111-148, which mandates that the value of the health coverage provided to an employee be reported on Form W-2 beginning January 2013.  The information required is the same as that required for calculation of the Cadillac tax, which is not effective until 2018.  Requiring employers to comply six years prior to any use of the data by the federal government is an unnecessary and wasteful regulatory burden. 

Bipartisan efforts that resulted in the repeal of the 1099 reporting requirement earlier this year reflect the reality that many provisions of Public Law 111-148 merit further review in light of our nation’s continued economic challenges.  The Section 9002 requirement does not serve any tax administration purpose, but will be complicated to implement.  It requires employers to develop new calculations for benefits not currently required for reporting in any form. Recognizing this fact, the IRS deferred implementation of Section 9002 for one year.  While the deferral was helpful, the requirement still imposes unnecessary costs and administrative burdens on employers at a time when they are still struggling to maintain and create jobs.  Furthermore, President Obama’s recent Executive Order (E.O. 13563) requires that federal agencies simplify regulations and reduce unnecessary paperwork requirements to help businesses succeed.  

The last thing employers need right now is another onerous mandate that creates uncertainty, confusion, and higher operating costs.  In reality, the W-2 reporting requirement would have this very effect.  For these reasons, we urge the IRS to defer implementation of this provision until 2018 to coincide with the implementation date of the Cadillac tax.  

Sincerely,

U.S. Senator Dean Heller
U.S. Senator Johnny Isakson
U.S. Senator Saxby Chambliss
U.S. Senator Scott Brown