Dentists and other small employers will not be required to report health care premiums on employees’ W-2 statements for the 2011 tax year, the IRS announced. Calling it “additional transition relief,” the IRS said employers who file fewer than 250 Forms W-2 in 2011 will not be required to report the cost of health care coverage prior to January 2014. This transition relief continues until the issuance of further guidance.

Although reporting the cost of health care coverage will eventually be required, doing so does not cause the cost of health care to become taxable, the IRS says. Because health care reform mandates that everyone have health insurance coverage, including the health care premium on W-2 forms will assist the IRS in verifying that coverage is in place for individuals and their families.  It also raises awareness of the value of employer-sponsored health insurance and helps identify the "Cadillac" health insurance plans that cost more than $10,200 for individual coverage and $27,500 for family coverage.  Beginning in 2018, employees will be taxed on these "gold-plated" health care plans.