A new feature has been added for 2015 to calculate the amount to report on the W-2 under Code DD for the Cost of employer-sponsored health coverage. This option requires that you have coverage information for employees in the Human Resources program. It determines which months each employee was coverage by a plan, and uses the annual cost for each plan to determine the amount to report based on the number of months each employee was enrolled.
If you do not have the coverage information entered in the HR program, this new option will not be able to calculate the correct amounts and you will need to edit the information by hand, as in past years.
To use this new option, after you have completed the archive of employee YTD totals, go to Payroll->Year End Tax Reporting->Edit YTD Archive File. Click on the Edit W-2 Info… button to open the grid-based entry for additional W-2 items:
Enter the Tax Year at the top of the window, then click on the Compile DD Amounts button at the bottom of the window.
A report will be generated and will appear in a preview window listing all of the employees with coverage records, how many month each employee was covered, what plan they were covered under, and the total cost of the coverage that will be added to their W-2 records. The program will ask if it is ok to update the Employer Sponsored Health Coverage Amounts. You should of course review the report before updating the amounts.
If an employee is covered under more than one plan in the year, each plan will be listed separately and the amounts for the two plans will be added together to print on the W-2.
This process can be performed multiple times, in case corrections are needed to coverage dates or insurance cost amounts on the HR side. You can of course manually enter/edit the amounts in the Employer Health Cov column after compiling the amounts if needed.
At the present time, this option picks up the cost information from the Cost/Deduction tab page of the medical plan setup. If you have changed these amounts for the 2016 plan year, the amounts would be incorrect. The next update of the HR program will include a feature for tracking costs by plan year; once this feature is in place, the Compile DD Amounts feature will use the costs for the 2015 plan year automatically. If you have not set them up, it will prompt you to do so. This way you will be able to have your current costs for 2016 entered on the plan, but program features that need to use the costs for a prior year will have those costs available to use.