Q.- Were we supposed to report the cost of COBRA coverage on Form W-2?
A.- It is our understanding that employers have a choice of reporting alternatives when an employee terminates mid-year or when a former employee has had continuation coverage for a full year. We believe the employer can report the cost of coverage during active employment, only, or the employer can report the cost of both active and COBRA coverage. The employer must act consistently. Consult your tax advisor.