Awesome

[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.

[Danzig]

i don't see why this would add govt jobs, w-2's already are verified by someone, one more blank to look at shouldn't make a big difference. they probably only verify a percentage.
and i don't see a correlation between adding that line now and a tax on the info later. but maybe i'm just being naive in that degree. they already track income before and then income after 401k deposits, even tho the after is the only one to be taxed at the time.

[AeWingnut]

is this why they need another 16,000 IRS agents?

[Cannon Shell]

Originally Posted by Danzig

and i don't see a correlation between adding that line now and a tax on the info later. but maybe i'm just being naive in that degree. they already track income before and then income after 401k deposits, even tho the after is the only one to be taxed at the time.

Q-What would the first step be if you (IRS) were going to include benefits as taxable income?

A-Carve out a line on the W-2 for the dollar value of your employers plan.

The IRS doesn't collect information for informational purposes. The Cadillac plans are already going to be taxed. The rest of us are the next step.

[clyde]

Originally Posted by 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.

Oh shut that big yap of yours.

[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.

[Riot]

Linda Bergthold
Health policy consultant
Posted: July 10, 2010 04:40 PM

Your Health Insurance Will NOT Be Taxed Next Year

There is another email making the rounds that claims that the new health reform law requires that you pay taxes on your employer-sponsored health insurance. It's not true. Politifact rates this email "pants on fire" and Snopes also rates this "false."

The email says the following:

Starting in 2011--next year--the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided. It doesn't matter if you're retired. Your gross income WILL go up by the amount of insurance your employer paid for. So you'll be required to pay taxes on a larger sum of money that you actually received. Take the tax form you just finished for 2009 and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That's what you'll pay next year. For many it puts you into a much higher bracket. This is how the government is going to buy insurance for fifteen (15) percent that don't have insurance and it's only part of the tax increases, but it's not really a "tax increase" as such, it a redefinition of your taxable income.

Politifact explains why this is not true about as well as anything I could write, including the following explanation (although Politifact does acknowledge that there is one piece of the email that is accurate):

The chain e-mail is correct that employers will be required to start listing the cost of insurance. The requirement starts for the tax year 2011, so employees will see it on the W-2s they receive in 2012.


But that amount will not be taxed. Current law excludes health insurance from taxable income, and there's nothing in the health care law that changes that.

Why is this provision in the law? It is there to assist the IRS in determining who has health insurance and who does not, because when health reform is fully implemented, there will be penalties for people who do not have health insurance and increased taxes starting in 2018 for the so-called "cadillac" plans -- plans that have a value above $10,200 for individuals and $27,500 for family policies.

Requiring employers to report the value of the health insurance they provide employees is not a bad idea, by the way. Most people have little idea how much their employer contributes, because they pay only a portion of the premium -- usually around 20 to 30%. The W2 will make it clear just what the value of that insurance is to the employee.

If you want an excellent summary of the provisions of the new law, go to the Kaiser Family Foundation (no relation to Kaiser health plans) website and look at the section on "new taxes." As mentioned above, employer provided health insurance is NOT taxable and the law does NOT change that provision.

There are no fewer than 4,250 "hits" on Google related to the key words "HR3590 and 2011 W 2 forms". Most of these sites repeat the misrepresentation of this provision in exactly the same words as the original email. Few sites question the accuracy of the information and most are fairly hysterical about it. In fact, I was only able to make it through 8 pages of the Google search before I gave up on websites such as well regulated American militias, swamp bubbles, duck south, and divorce forum. So if you receive this email or hear about it -- pass along the accurate information!

[Cannon Shell]

Originally Posted by Riot

Linda Bergthold
Health policy consultant
Posted: July 10, 2010 04:40 PM

Your Health Insurance Will NOT Be Taxed Next Year

There is another email making the rounds that claims that the new health reform law requires that you pay taxes on your employer-sponsored health insurance. It's not true. Politifact rates this email "pants on fire" and Snopes also rates this "false."

The email says the following:



Politifact explains why this is not true about as well as anything I could write, including the following explanation (although Politifact does acknowledge that there is one piece of the email that is accurate):

The chain e-mail is correct that employers will be required to start listing the cost of insurance. The requirement starts for the tax year 2011, so employees will see it on the W-2s they receive in 2012.


But that amount will not be taxed. Current law excludes health insurance from taxable income, and there's nothing in the health care law that changes that.

Why is this provision in the law? It is there to assist the IRS in determining who has health insurance and who does not, because when health reform is fully implemented, there will be penalties for people who do not have health insurance and increased taxes starting in 2018 for the so-called "cadillac" plans -- plans that have a value above $10,200 for individuals and $27,500 for family policies.

Requiring employers to report the value of the health insurance they provide employees is not a bad idea, by the way. Most people have little idea how much their employer contributes, because they pay only a portion of the premium -- usually around 20 to 30%. The W2 will make it clear just what the value of that insurance is to the employee.

If you want an excellent summary of the provisions of the new law, go to the Kaiser Family Foundation (no relation to Kaiser health plans) website and look at the section on "new taxes." As mentioned above, employer provided health insurance is NOT taxable and the law does NOT change that provision.

There are no fewer than 4,250 "hits" on Google related to the key words "HR3590 and 2011 W 2 forms". Most of these sites repeat the misrepresentation of this provision in exactly the same words as the original email. Few sites question the accuracy of the information and most are fairly hysterical about it. In fact, I was only able to make it through 8 pages of the Google search before I gave up on websites such as well regulated American militias, swamp bubbles, duck south, and divorce forum. So if you receive this email or hear about it -- pass along the accurate information!

Keywords or comments:
-"Your Health Insurance Will NOT Be Taxed Next Year"
"next year" is just one year

- "Current law excludes health insurance from taxable income, and there's nothing in the health care law that changes that."
Yes we know this. But there is nothing to say that it wont be done in the future. 6 months ago, mandatory healthcare wasnt a current law either.

- It is there to assist the IRS in determining who has health insurance and who does not, because when health reform is fully implemented, there will be penalties for people who do not have health insurance and increased taxes starting in 2018 for the so-called "cadillac" plans -- plans that have a value above $10,200 for individuals and $27,500 for family policies.
Remember the "next year" comment above? The information IS going to be used to tax individuals, just not yet. So in 8 years from now a $10200 policy will still be a cadillac plan? ok.

-"employer provided health insurance is NOT taxable and the law does NOT change that provision"
yeah THIS one doesn't but as brian pointed out another one could.

-"There are no fewer than 4,250 "hits" on Google related to the key words "HR3590 and 2011 W 2 forms". Most of these sites repeat the misrepresentation of this provision in exactly the same words as the original email. Few sites question the accuracy of the information and most are fairly hysterical about it. In fact, I was only able to make it through 8 pages of the Google search before I gave up on websites such as well regulated American militias, swamp bubbles, duck south, and divorce forum. So if you receive this email or hear about it -- pass along the accurate information"

Sure only nutjobs are worried that they might be taxed on their benefits because all the sane people trust the IRS to fairly tax them their "just" share.

[brianwspencer]

Originally Posted by Cannon Shell

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.

Originally Posted by Cannon Shell

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.

Those are some neat guesses.

I also think that the IRS has our employers include the amount withheld from our checks because someday down the road they are just going to return that money to us.

It's not law yet, but it's pretty easy to see that it's coming. I mean, since we just get to guess and make sh*t up depending on our political view rather than reality on the ground, right?

[Cannon Shell]

Originally Posted by brianwspencer

Those are some neat guesses.

I also think that the IRS has our employers include the amount withheld from our checks because someday down the road they are just going to return that money to us.

It's not law yet, but it's pretty easy to see that it's coming. I mean, since we just get to guess and make sh*t up depending on our political view rather than reality on the ground, right?

LOL

I am not "making anything up". What I am proposing is hardly far fetched and in 2018 it actually comes true "according to law". You see the "cadillac" plans ARE going to be the basis of a tax according to the law. Perhaps you simply want to close your eyes and pretend it won't happen or believe that you are safe because you won't have one of those plans but one thing that is sure is death and taxes and when numbers go onto your W-2, eventually it will be taxed.

And when the GOP retakes control, it proves to difficult/impossible to repeal the healthcare debacle, they may be the ones that execute the plan on taxing health benefits.