2011 W-2 to tax Health Care costs?

***2011 W-2 to tax Health Care costs? ***

Some is true, some isn’t

An interesting e-mail is floating around the internet claiming that, “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.”

The St. Petersburg Times reports that the chain e-mail is correct that employers will be required to start listing the cost of insurance, but that will be for tax year 2011, and won’t be reflected until 2012.

The Times also states that the amount will not be taxed due to current law excluding health insurance as taxable income, and that there is nothing in the new health care law that changes that. Note: that’s current law.

Click here for the rest of the article.

The idea that employer provided health insurance should be tax exempt is one of the silliest ideas around. After all, if we are going to tax income, then all income should be taxed, whether it is in the form of cash or if it is in-kind income such as your employer buying something on your behalf.

we could all save ourselves a lot of time and HBP by going first to snopes.com to check out these emails (which I delete unread if they are ffws to multiple recipients)

PA, please re-read my article. I’ve already stated that the nonsense about our HC costs being taxable is a myth, right?

What is scary here is that in 2012, the IRS will know who has NOT bought HC Ins, and will fine them.

That’s unconstitutional.

This does point to something I’ve been saying for a long time – nobody (or hardly anybody) knows what costs what in health care.
I know what is taken out of my paycheck but not how much my employer pays for my insurance.
I know what my copays are for meds, ofc visits & tests but not what the insurance companies pay providers.

So for the same service Dr Jones (making these numbers up) gets $68 (ins+co-pay) from patient A, $79 from B, and $52.50 from C, the Medicaid guy. To make up for this he charges uninsured patients (cash customers) $100. Maybe without all the folderol and paperwork he could charge everybody a flat $75 and do more actual doctoring.

Hell of a system, no?

As for fining businesses that fail to insure their employees, how many will decide it’s cheaper to pay the fines’ Or that they’ll fire folks until they’re below the threshold?

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