Awesome

[Honu]

Go to the bill itself scroll down to section 9002, it clearly states that people will have what their employers pay in insurance for them added to their W2. For me its no big deal because trainers dont provide health insurance for their employees but for my partner it could be a pretty big addition to her payroll.
Maybe I misunderstand it then, to me it seems that bill states that what the employer spends on insurance will be added to the employees taxable earnings, Id love to be wrong about this.

[brianwspencer]

Originally Posted by Honu

Go to the bill itself scroll down to section 9002, it clearly states that people will have what their employers pay in insurance for them added to their W2. For me its no big deal because trainers dont provide health insurance for their employees but for my partner it could be a pretty big addition to her payroll.
Maybe I misunderstand it then, to me it seems that bill states that what the employer spends on insurance will be added to the employees taxable earnings, Id love to be wrong about this.

I quoted Sec 9002 above and laid out why I think you are wrong, which I certainly hope you are, because that would be absurd.

The way I read it, those whose employers pay more than $8K/yr for one employee or $23K/yr for employee + family, would be subject to a 40% tax on the premium paid ABOVE that amount.

But how would the government know what the employer paid in premium contributions? They would know because it will be included on the W-2, which is, by my reading, what Sec. 9002 says. I don't interpret that in any way to say that the employer contributions will be rolled into gross income (thereby making them taxable income for EVERYONE), but rather that they will be included on the W-2 as a piece of information relevant for tax purposes.

See what I'm saying with that? I hope I'm right, or I'll be right there with you blasting this....but I think I'm right on this one.

[Honu]

Originally Posted by brianwspencer

I quoted Sec 9002 above and laid out why I think you are wrong, which I certainly hope you are, because that would be absurd.

The way I read it, those whose employers pay more than $8K/yr for one employee or $23K/yr for employee + family, would be subject to a 40% tax on the premium paid ABOVE that amount.

But how would the government know what the employer paid in premium contributions? They would know because it will be included on the W-2, which is, by my reading, what Sec. 9002 says. I don't interpret that in any way to say that the employer contributions will be rolled into gross income (thereby making them taxable income for EVERYONE), but rather that they will be included on the W-2 as a piece of information relevant for tax purposes.

See what I'm saying with that? I hope I'm right, or I'll be right there with you blasting this....but I think I'm right on this one.

I hear ya and I hope you are right, but why would it be included on a taxable wage form if they werent going to tax it? Why does the government need to include it on a employees W2 form when Im sure the information is already available to them through the employer. It doesnt make sense that now after health care reform that the feds need to know. What is the purpose of this?
Dude Im so hoping I am wrong and you are right and I guess when we file our taxes for 2011 we will find out.

[brianwspencer]

Originally Posted by Honu

I hear ya and I hope you are right, but why would it be included on a taxable wage form if they werent going to tax it? Why does the government need to include it on a employees W2 form when Im sure the information is already available to them through the employer. It doesnt make sense that now after health care reform that the feds need to know. What is the purpose of this?
Dude Im so hoping I am wrong and you are right and I guess in when we file our taxes for 2011 we will find out.

I'm assuming it's because if you've got a "Cadillac" plan, then your tax preparer will have your W-2 and know to account for that tax. There's a grievance to be had against taxing that in ANY case, but that's separate.

If the government knows, but the tax preparer doesn't know, then taxes will be underpaid, the IRS will go nuts, and it'll be a BIG issue because nobody will know what they really need to pay. And they'd include it on a "taxable wage form," because for SOME people, it would be taxable (above a certain threshold in very expensive plans).

My honest understanding is that there's nothing in here to include it in "earnings," but rather it will be included as a subset of information on the W-2, much like taxes withheld are, so that people aren't blindsided.

And like you, I hope I'm right, because though it won't affect me right now, that'd be way too problematic. But I'd imagine I am right, because for as much as anyone thinks voting for healthcare is political suicide in the first place, if you're right, this is a vote to OUTRIGHT raise every person with employer sponsored healthcare's taxes to a ridiculous degree, and for as stupid as our Pols are, I'm not sure they're THAT stupid.

[hi_im_god]

i'm pretty sure that if everyones employee provided health insurance was now taxable the death panel crowd would have noticed and headlined it.

[Honu]

Glad this has all been cleared up, I wasnt so worried for me but I was for my partner, we are lucky that her company includes domestic partners in their health plan which provides me with insurance that I would'nt be able to have otherwise. I still am not seeing the purpose of it being on a W2 but whatever the government knows whats best.

[Danzig]

Originally Posted by Honu

Glad this has all been cleared up, I wasnt so worried for me but I was for my partner, we are lucky that her company includes domestic partners in their health plan which provides me with insurance that I would'nt be able to have otherwise. I still am not seeing the purpose of it being on a W2 but whatever the government knows whats best.

it probably has to do with something between the employer and the government. maybe has something to do with cafeteria plans as well? don't know really, just guessing...

[Cannon Shell]

The first step is to add it to the W-2. Once that happens it is only a matter of time before it becomes taxed.

Plus this will cost businesses money to add this number and because the accuracy is of utmost importance as the initial reasoning behind this is to put the burden of proof that employers are actually providing the required insurance on the employers themselves via the W-2's.

The funding mechanism behind the health care plan is seriously flawed and once the reality that it will come up massively short the next step will to be simply tax the benefits as income.