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The cost of health care insurance
1. THE COST OF HEALTH CARE
INSURANCE
The value of health care coverage provided by your employer is now
reported in Box 12 with Code DD to identify the amount. The amount
reported in the box should include both the portion paid by your
employer and any amount paid in by you.
So why is this information showing up on your form W-2 now? Under the
Affordable Care Act – you may also refer to it as Obama care or the
health care act – most employers must now report the cost of your
health care plan (a few small businesses are still exempt from reporting
under the transitional relief offered by IRS).
http://www.uscpronline.com/
2. The Average Cost of Healthcare for
a Typical American Family
Chances are that number is more than you thought. A lot more.
The average cost of healthcare for a typical American family of four
in an employer-sponsored health plan in 2012 was $20,728. On
average, employers paid $12,144 of that total cost while employees
paid the rest. Employer contributions for health care plans for the
typical American family are now nearly equivalent to the salary of a
full time employment for a worker who is paid minimum wage.
That’s why most Americans don’t even know how much their health
care coverage costs. It’s one of those benefits that many of us take
for granted because we don’t see it on a tax or wage form.
http://www.uscpronline.com/
3. Taxpayers Aware
The reporting requirement under the new law will make many more
taxpayers aware of the actual cost of their health care benefits.
What’s not changing is the tax treatment of those benefits. It
remains federal income tax free to you as an employee. So if you see
wages of, say, $50,000 in Box 1 and benefits marked “DD” for health
care insurance paid in $15,000 in Box 12, your income for purposes of
calculating your federal income tax liability remains $50,000.
http://www.uscpronline.com/
4. W-2
The requirement that the benefits are reported on your form W-2 is
“for informational purposes only.” The purpose of the rule, according
to the IRS, is to “provide employees useful and comparable
consumer information on the cost of their health care coverage.”
And believe it or not, that specific requirement wasn’t a partisan
move: it was actually proposed by a bipartisan quartet made up of
Sen. Max Baucus (D-MT); Michael B. Enzi (R-WY); Sen. Charles E.
Grassley (R-IA); and Sen. Ron Wyden (D-OR).
http://www.uscpronline.com/
5. Honestly
let’s be honest: is it really just for informational purposes? The IRS
and Congress both say yes – for now. But a number of taxpayers fear
that it’s not. That fear isn’t totally unfounded. The tax free treatment
of health care insurance benefits is a whopping $180 billion tax
break to employees.
http://www.uscpronline.com/
6. Continue
And while for now raising the notion of taxing health care coverage –
especially now that it’s mandated – would be political suicide, that
doesn’t mean that won’t change. You know that somewhere, some
Senator has circled that number – $180 billion – in red ink.
http://www.uscpronline.com/