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Obama-Care Requires W2s List Health Plan Cost

From the New York Times:

To Open Eyes, W-2s List Cost of Providing a Health Plan

By ROBERT PEAR | January 29, 2013

WASHINGTON — As workers open their W-2 forms this month, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.

Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.

The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.

And, once these benefits are taxed, more employees will demand changing over to Obama-Care. Which will eventually be the only option, except perhaps for the truly wealthy.

The new information appears in Box 12 of the standard W-2 form, with a two-letter code, DD. The box shows the “cost of employer-sponsored health coverage.” And that amount is not taxable, the Internal Revenue Service says on the back of the form.

For now.

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction after seeing that his health coverage cost nearly $16,000 last year: “It’s quite expensive. I was surprised to see how much the company was paying for that benefit.”

The irony here is that employer provided healthcare started in the auto industry during WWII when wage controls kept the car companies from competing for employees by offering higher salaries. So GM came up with the idea of offering health care benefits. And the rest is history.

Hourly employees represented by the union there said they generally did not pay any of the premium…

Which is why GM and Chrysler went belly up, and we the taxpayers had to bail out the UAW’s pension and benefits programs.

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, said, “Most people who get health insurance from their employers have no idea how much it costs.”

“People are often shocked when they see the cost, $12,000 to $16,000 a year,” Ms. Huberfeld said. “Many Americans believe this is something they get free. But employers pay lower wages because they provide insurance.”

These people should try buying insurance on the open market. They could pay that much in premiums for just a single month.

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. Over five years, the costs have increased 25 percent for individual coverage and 30 percent for family coverage…

And they are going up even faster under Obama-Care, because of all of the news things they are mandated to provide ‘for free.’

Congress acted after Peter R. Orszag, then the director of the Congressional Budget Office, told lawmakers: “The economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”

Gee, Peter Orszag really must be smart to have figured that out.

The tax-free treatment of employer-provided health benefits is the largest tax break in the tax code, costing the government roughly $180 billion a year in lost revenue, or 80 percent more than the home mortgage interest deduction, according to the administration…

Here it comes. We simply cannot allow employers to steal $180 billion dollars from the government every year.

An employee of the A.F.L.-C.I.O. whose health coverage was listed as costing more than $20,000 said: “That knocks my socks off. When I saw the number, my eyes popped out. I appreciate my employer all the more.” …

This is your low information voters speaking.

An employer that fails to comply with the reporting requirement could be subject to penalties of $200 per W-2 form, up to a maximum of $3 million, tax lawyers said.

Employers are exempt from the reporting obligation if they are required to file fewer than 250 W-2 forms, the I.R.S. said. That could change, but the agency said employers would be given at least six months’ notice.

Don’t worry, it won’t be long before every employer has to not only provide this information, but pay the tax on it. We can’t let them go on keeping the government’s money forever.

This article was posted by Steve on Wednesday, January 30th, 2013. Comments are currently closed.

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