YOUR HEALTH INSURANCE PREMIUMS WILL BE REPORTED ON YOUR W-2 STARTING THIS YEAR

Not comfortable with that? Well, I’ve got some bad news for you: the information is going to be there whether you like it or not. Why? Because Obamacare requires it:

Look closely at your new W-2 form this tax season. Notice Box 12 and the two-letter code DD. If you work for an employer with 250 or more workers, information in that box for the first time is required by the Affordable Care Act.

And, starting next year, it will be required for employers with fewer than 250 employees. Now why do you suppose they want that data on your W-2?

The health insurance benefit amount isn’t taxable as personal income—-for now, anyway. But … the Box 12, DD information lays the groundwork for possible future tax law changes if Congress decides the value of that employee benefit should be taxed.

If you can’t see where this is going, I recommend a white cane with a red tip. It won’t be long before the amounts you and your employer pay for health insurance will become taxable compensation.

Somehow, the “Affordable Care Act” is becoming less and less affordable.

Comments 5

  1. Brian T. Schwartz wrote:

    The only way taxing employer-provided health insurance premiums could be good is that if income tax rates were decreased such that the change were revenue neutral.

    After all, the tax code’s bias toward paying for medical care through insurance — an employer-based insurance worse yet — is a big problem.

    Posted 20 Feb 2013 at 1:31 am
  2. Catron wrote:

    Unfortunately, I don’t think they will do the right thing here. They’ll probably leave the employer-based model in place and just tax the bejabbers out of us. “Revenue neutral” isn’t in their vocabularies unless it’s an election year.

    Posted 20 Feb 2013 at 7:39 pm
  3. Brian T. Schwartz wrote:

    Yes. Sad, but true.

    Posted 21 Feb 2013 at 12:30 am
  4. David Hogberg wrote:

    Why “revenue neutrality”? Why not “revenue non-neutrality”? Why not raises taxes on some items and lower taxes on others by a greater amount? Oh, and we shouldn’t use technical terms like “revenue non-neutrality.” Call it by its down-to-earth name, “tax fairness.”

    Posted 26 Feb 2013 at 10:31 am
  5. Catron wrote:

    I fear that “tax fairness” is something of an oxymoron these days, and open to considerable interpretation (particularly where the current WH and Senate are concerned).

    My idea of fairness in financial transactions involves Entity A presenting Entity B with a bill for services rendered. Their idea of fairness involves robbing entities B, C, D, E and F in order to obtain funds to buy votes.

    Posted 26 Feb 2013 at 8:26 pm

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