Obama Care and 2011 Taxes
I have heard that in 2011 an employer who provides Healthcare benefits will include the cost of such plans in an employee’s
W2 as earned income. The purpose is to start to pay for the Obama Health Care Plan.
If this is true, it will affect everyone.
Is this TRUE?
Thank you,
MSwartz 😥
Permalink Submitted by Alan Spross on Wed, 2010-07-07 18:56
My impression is that the W-2 healthcare value is not earned income, but a figure the govt plans to use to determine the excise tax on plans valued over the threshold that applies. Those plans would then be surcharged, and presumably the plans would then pass those costs to employees in the form of higher premiums or more likely, the plans would reduce benefits to get under the threshold to avoid the surcharge.
The threshold is fairly high because Obamacare did not want too many union plans to fall under the surcharge.
I think the W-2 figure for the plan value is the total of the employer cost plus the premium passed through to employees. The company would have to deal with all the part year employees in order to get a properly weighted total cost per employee, and also per family.
Permalink Submitted by Clyde Wolf on Wed, 2010-07-07 19:00
No, this is not quite true.
The value of your health care benefit will be reported on your W-2 for 2011, the W-2 you will receive in 2012. This health care benefit will not be included in your income. The intent here is to let the employee know how much the employer is spending for the employee’s health care. The emmployee is then to take some responsibility to help control health care costs.
No tax for the employee, but a cost to employers.
http://www.kiplinger.com/columns/washington/archives/no-health-benefits-…
Permalink Submitted by Al Fry on Thu, 2010-07-08 20:20
I believe the excise tax is 40%, however the threshholds are $8500 for single coverage; $23000 for family coverage.