Awesome

[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.

[Honu]

Originally Posted by 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.

You may be onto something with that ....it will create more government jobs because we will for sure need some more people to oversee that this is done and since the stimulus package is mostly going to create more government jobs they need something for these employees to do.

[brianwspencer]

Originally Posted by 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.

But that's just a guess. A bill would have to be passed to make that the new law, and that would be something we would all fight against regardless of the party...it's not something that they're just going to be able to say "well here's a source of income," and decide without a vote that said taxation is the new rule.

This is nothing but pure conjecture.

[trackrat59]

I work in health care with physicians. I'm far from an expert on this topic so this is just a guess on my part.

I remember reading that there will be additional taxes for health care insurance companies. The amount being stated on employees' W-2s could be connected to the increased tax the carriers are being asked to pay. It might be that they will use the total cost employers are paying for health care and tie that number back to additional taxes for the insurance companies. The total cost being paid per employee being stated on a W-2 would validate the cost to the employer therefore establishing a real total number to tax the insurance companies on.

If this is correct it will be a Catch-22 for insurance companies. The more they charge the higher they are taxed.

Not being Pollyanna and just a guess on my part based on what I read about the additional taxes to carriers.

Will each of us wind up paying more in the end? Likely.

[Cannon Shell]

Originally Posted by brianwspencer

But that's just a guess. A bill would have to be passed to make that the new law, and that would be something we would all fight against regardless of the party...it's not something that they're just going to be able to say "well here's a source of income," and decide without a vote that said taxation is the new rule.

This is nothing but pure conjecture.

Speculation would be a better word. But when the IRS starts requiring us to add the dollar value of benefits to the form on which we show income for tax purposes it is hardly a stretch to think that these benefits wont eventually be taxed.

Hundreds of new tax laws are passed every year, the many of them piggybacked on other bills, sometimes in the middle of the night. As you pointed out the opposition to this would be strong which is why it is being phased in gradually. The healthcare bill never would have passed with everybody's heathcare plans being included. Of course the "cadillac" plans are fair game because of those pesky rich people, the definition of which is poorer than it used to be.

Anyone who thinks that the govt, the current admisistration especially, isn't going to eventually dig deeper into your pockets to pay for their spending sprees is kidding themselves.