2011 – Are Employer Contributions Now Taxable Income?

In Finance by Sam0 Comments

Starting in 2011, the new health law requires employers to begin reporting the value of the health benefits they provide to employees on their W-2 forms — the wage and tax statement you receive to use when filing your taxes. But the amount on the form is for informational purposes only. As is now the case, you’ll owe no tax on your employer’s contributions to your health insurance. “I think the provision is intended to raise awareness about how much employee health benefits cost,” said Timothy Jost, a law professor at Washington and Lee University. (NY Times)

opinion):

I chuckle that this law professor thinks the proposal is to raise awareness about how much benefits cost. That does not require listing the cost (and therefore the presence or absence of insurance) on your W-2 form.This law simply takes more of our information and gives it to the IRS. They may do whatever they wish with it, and considering the tax code is over 8,000 pages long, and so complex even the EZ directions takes up 41 pages.  This is the sorry collateral damage of this so-called health insurance reform, a massive increase in the number (and cost) of new agencies, commissions, authorities and bureaus- all of which have to be funded by the money that used to go towards your insurance or doctor’s bill. The mandates are an enormous burden for doctors and patients alike, and will certainly cause an increase in healthcare costs, and allow Washington to micro-manage each of our lives to a greater degree than ever before. It’s silly to think this is informational, it’s just more government intrusion into our lives. Don’t be surprised when employers point to this new line on our W-2 form and tell us this contribution is in lieu of our raise or bonus. And don’t be at all surprised when in a year or two it becomes taxable income. After all, it’s already on your W-2. This is called “how to boil a frog.” 
Skeetlebutt
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