There is a popular email chain letter being circulated stating that a new tax that is created by Health Care Reform, which requires employers to add the cost of your health insurance benefits to your W-2.
The chain letter is correct that employers will be required to start listing the cost of insurance. The requirement starts for the tax year 2011, so employees will see it on the W-2s they receive in 2012. But that amount will NOT be taxed.
This provision is in the law to assist the IRS in determining who has health insurance and who does not, because when health reform is fully implemented, there will be penalties for people who do not have health insurance and increased taxes starting in 2018 for the so-called "Cadillac" plans -- plans that have a value above $10,200 for individuals and $27,500 for family policies.
Requiring employers to report the value of the health insurance they provide employees is not a bad idea, by the way. Most people have little idea how much their employer contributes, because they pay only a portion of the premium -- usually around 20 to 30%. The W2 will make it clear just what the value of that insurance is to the employee.
To see a summary of these provisions of the new law, go to the Kaiser Family Foundation (no relation to Kaiser health plans) website and look at the section on "new taxes." As mentioned above, employer provided health insurance is NOT taxable and the law does NOT change that provision.
For individual, family or group health insurance quotes online visit Quotebroker. Quotebroker provides free instant health insurance quotes, policy analysis and the ability to purchase insurance online 24/7.
