Many employers are required to report the cost of an employee's health care benefits in Box 12 of Form W-2, using Code DD to identify the amount.
This amount is reported for informational purposes only and is NOT taxable. It is included in Box 12 in order to provide comparable consumer information on the cost of health care coverage.
In general, the amount reported will include the portion paid by the employer as well as the portion paid by the employee. It will not include the amount of any salary reduction contributions.
The Patient Protection and Affordable Care Act added the requirement for employers to list on an employee's W-2 the "aggregate cost" of applicable employer-sponsored coverage. The requirement was optional for 2011, so most employees will see this amount reported for the first time in 2012. Reporting for certain small employers remains optional until 2013.
For more information see the IRS Questions and Answers to help understand ACA Reporting Requirements