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Old 01-31-2013, 09:31 AM   #21
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True. But left pocket - right pocket. You would just pay taxes on something else.

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I'm slow this AM. Can you explain a little further?
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Old 01-31-2013, 09:33 AM   #22
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We just got DW's W-2 yesterday and I noticed same, didn't know what it was at first. I knew exactly what HC cost/employee at my former employer was (with and without empl contributions), but she'd never heard estimates at her .org employer. Her DD was $16,641! She also contributed $4160 medical & $153 dental, though NOT over and above DD I assume? Plus out-of-pocket!!!

I also got an online estimate (using a link an ER member provided yesterday) of what we'll spend for HC once ACA is fully enacted, and the estimate was $18,864/yr. We only spend about $41K/yr on all other expenses, there is something wrong when two healthy adults have to cough up $19K for health care - 32% of expenses. I was hopefully estimating $12K/yr even though I knew I was kidding myself.

"We" can't get to addressing the cost, and rate of increase, of HC in this country (relative to the rest of the world) too soon for my tastes...[/rant]
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Old 01-31-2013, 09:34 AM   #23
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Sounds like a potential build-up for when and if they decide to start taxing it...
My thoughts exactly. Get the mechanism in place....
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Old 01-31-2013, 09:34 AM   #24
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i believe Obamacare taxes cadillac insurance plans
I think this provision was postponed until 2018, but they are already showing the amount on the W-2 to "get ready" for it and so people have an idea where they are with respect to this future tax. The threshold is something like $10K for individuals and $25K for families, so it is a pretty high amount. The biggest problem with it is that it's not indexed for inflation, so it's "bracket creep" and the AMT problem all over again.
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Old 01-31-2013, 09:37 AM   #25
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Wow, per my W-2, my employer only pays $3,600 a year for me (HSA plan, no employer contribution, but I don't pay any premiums), which is still 2-3x what I think I'd pay on the private market (34, M, healthy)
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Old 01-31-2013, 09:39 AM   #26
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Form W-2 Reporting of Employer-Sponsored Health Coverage
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Old 01-31-2013, 09:45 AM   #27
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I'm slow this AM. Can you explain a little further?
My thoughts in the big scheme of things is that healthcare pre-tax just means more income tax due later. I remember when I worked that the pre-tax premium while it put more $ in my pocket initially, just meant I had to pay out more $ at tax time.

But then, I was earning enough so not paying taxes up front was necessary to cover basic expenses.

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Old 01-31-2013, 09:49 AM   #28
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At least at our company - the total health care costs were available - if you went looking. It was the COBRA tables, and were posted on the internal HR website.
I always looked at these during open enrollment. I was always curious about how much the megacorp was paying, and how much the employee was paying. A few years ago the ratio started shifting towards a bigger burden on the employee for family coverage. (single remained the same ratio). That shift of burden, combined with increased premiums, made for a big impact on the payroll deductions. Lots of folks didn't do the math till I pointed it out. (I'm a trouble maker.) Many switched to spouse's work coverage after doing the math.
My former employer had a target of 20% for employee contributions, though they never achieved it during the 16 years I was with them. They probably averaged about 15-18%. Very few employees knew how much HC costs really were even though we shared them several times/year ('oh, they're lying') and a significant minority thought they were paying way too much, 'shouldn't have to pay anything.' The few who had to consider COBRA on leaving were shocked, 'you're kidding, I can't afford that!' Ah, I miss the good old days...
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Old 01-31-2013, 10:07 AM   #29
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so I guess this dd box is for information only and it does not add in anywhere?

makes me wonder why they are doing this....first step in changing it to add in as income?


from reading all the posts makes you wonder how unfair it seems with the big difference in the amounts and the fact that some of us that have to pay with after tax dollars.


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Old 01-31-2013, 10:37 AM   #30
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Originally Posted by Gotadimple View Post
My thoughts in the big scheme of things is that healthcare pre-tax just means more income tax due later. I remember when I worked that the pre-tax premium while it put more $ in my pocket initially, just meant I had to pay out more $ at tax time.

But then, I was earning enough so not paying taxes up front was necessary to cover basic expenses.

Rita
Well it doesn't work out that way for health care insurance which is an expense, not a tax-deferred savings with some future tax ramifications. It's simply a major tax break for those with employer-provided health insurance.

If what you're saying is that the employer is getting a better deal through their group rate - well, that just adds insult to injury, as the individual often has to pay a higher individual rate AND with after tax dollars.
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Old 01-31-2013, 10:56 AM   #31
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Even without knowing policy specifics, at least it appears we're all in the same ballpark. Excluding the one post identified as single:

$17,214
$13,000
$12,683
$16,176
$12,144
$16,641

I do read posts here from time to time with people buying private insurance at much lower rates, though I can only assume the coverage and/or deductibles are different.
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Old 01-31-2013, 11:00 AM   #32
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I have a crazy crazy cadillac plan - it was over 38k for a family of 3.
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Old 01-31-2013, 11:03 AM   #33
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here is a twist: my wife worked half the year but is covered on my plan, so nothing listed for health care on her W2. I am retired with a pension and full health care, but nothing listed on the 1099R I received.
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Old 01-31-2013, 11:03 AM   #34
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Well it doesn't work out that way for health care insurance which is an expense, not a tax-deferred savings with some future tax ramifications. It's simply a major tax break for those with employer-provided health insurance.
Thanks. This is the way I understand it, too. Add in that someone paying their own health care insurance is more likely to be a low paid worker than someone getting employer supplied health care, and it does seem regressive.
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Old 01-31-2013, 11:15 AM   #35
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I am single with a HSA plan. My DD amount was only $4,050 for the year. I would have guessed my plan cost my employeer much more than that. They do contribute $500 to my HSA per year which I believe is in that number.

My employee contribution was only $540 for the year ($20.77 per paycheck). Seems like I am getting a bargain compared to most? I did have out of pocket expenses for medical of $700 last year though. It was higher than normal due to a severe sprained ankle that required some x-rays, boot and several office visits.

My long-term disability insurance I purchase via payroll deduction is actually more than my health care.
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Old 01-31-2013, 11:20 AM   #36
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Thanks. This is the way I understand it, too. Add in that someone paying their own health care insurance is more likely to be a low paid worker than someone getting employer supplied health care, and it does seem regressive.
Especially when you work at a crummy job for someone else with no health insurance. The self-employed can generally deduct the premiums they pay, but those who are employed but buy their own health insurance (or those who are retired) can not.
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Old 01-31-2013, 11:41 AM   #37
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So, would I be correct in saying that if your employer provides you with health care, it is tax free to you, but if you have to purchase your own health care, you pay for it with after tax money?

If true, that would seem kind of regressive.
Now if your employer offers a Benefit Cost reduction plan you can pay your share pre-tax. If you are paying after tax dollars if the total of all medical payments exceeds 10% then you can deduct the amount above 10% for 2013
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Old 01-31-2013, 11:42 AM   #38
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Ours is $19, 087 for DH and myself. We pay $3,600 for our 20% of the medical plan through payroll ded as well as approx. $3K out of pocket each year. Interestingly, my retiree bens once DH retires would cost me $7.5K/yr for medical plan only (no dental & vision and whatever else is included in the $9.5K pp on our 12DD).
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Old 01-31-2013, 12:26 PM   #39
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Sounds like a potential build-up for when and if they decide to start taxing it...
+1.
Just like muni bond interest reporting has lead to more & more of that being functionally taxed (e.g. non-AMT bonds, MAGI for ACA subsidies, etc.).
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Old 01-31-2013, 12:44 PM   #40
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+1.
Just like muni bond interest reporting has lead to more & more of that being functionally taxed (e.g. non-AMT bonds, MAGI for ACA subsidies, etc.).
Or included as "imputed income" for potential future means testing for various entitlements? All conjecture, but it feels like we may be headed down that road, especially if you are under about 50-55 years old. There is plenty they *could* do with it, but right now it's only going to be used starting in 2018 to determine what is a "Cadillac" health plan.
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