The amount reported on the W-2 is the total reimbursement allowance that the eligible employee is entitled to receive from the QSEHRA for the calendar year. Please note, this amount may differ from what the employee actually received. The IRS is only interested in the amount the employee was entitled to.
Who is an "Eligible Employee?"
When determining which employees should have the benefit reported on their W-2, remember that their eligibility is determined by how you structure your QSEHRA, not whether they have eligible coverage. For example, if you structure your QSEHRA to allow all employees who:
Are regularly scheduled to work 35+ hours per week and
Have been employed at your company for at least 30 days
Then all full-time employees who have been employed for 30+ days are "Eligible Employees."
Whether or not they have insurance or have an eligible reimbursement claim to make does not matter as long as they are "Eligible" according to your plan documents.
What if an eligible employee did not use the QSEHRA?
The QSEHRA benefit needs to be reported on all eligible employee W-2’s regardless of participation. The employer must report the amount of benefit the employee was entitled to receive on the W-2 the same as the employees who participated in the QSEHRA.