Awesome

[brianwspencer]

Honu -- to be honest, I did exactly what you said we should do and looked up the bill, and it says nothing at all about everyone paying taxes on their employer's contributions to their healthcare plans.

Where did the last paragraph in your post come from?

On CRS summary, the only mention of W-2s in the bill says this:

Amends the Internal Revenue Code to impose an excise tax of 40% of the excess benefit from certain high cost employer-sponsored health coverage. Deems any amount which exceeds payment of $8,500 for an employee self-only coverage plan and $23,000 for employees with other than self-only coverage (family plans) as an excess benefit. Increases such amounts for certain retirees and employees who are engaged in high-risk professions (e.g., law enforcement officers, emergency medical first responders, or longshore workers). Imposes a penalty on employers and coverage providers for failure to calculate the proper amount of an excess benefit.

(Sec. 9002) Requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee's gross income (excluding the value of contributions to flexible spending arrangements).

To me, and I'm totally okay being wrong if someone has better info than what I gleaned from reading this -- that says that the so-called "Cadillac" plans will be taxed at 40% at anything over $8,000/yr. It's okay if you have a problem with that, but that's not news, everyone knew that was going to happen.

$8,000/yr is an awful lot of money, and it won't affect very many people is my best guess. My old employer had EXCELLENT health insurance that covered basically everything with no deductible, and they only contributed about $5,000/yr to it....

So like I said, it's okay to have a problem with that, but your post makes it sound like every American with employer-sponsored health insurance is going to start paying income taxes on the employer's contributions, which as far as I can tell, is 100% false, if I've read the above provisions correctly, as it simply says that the value of those contributions will be noted on the W-2, *not* included in the gross earnings -- as obviously it would have to be noted on a W-2 in order to determine who qualified for the excess tax listed above...they can't just guess.

At least, I hope I'm right.

[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...

[clyde]

That was awesome!!





(What the fucl< did he say?)