Health care insurance costs now on W-2

[Semiretired2008]

Just got my W2 today and it is being taxed under SS and Medicare wages.

I was a part time employee - 20hrs a week for a few months last year for one particular company. I was only offered partial benefits as a part timer. Being retired military I took no medical coverage (it was to expensive for part timers - almost as much as me taking an individual policy). They also did offer dental and vision. I took the dental - needed some bridge work.

These were optional categories under the W2 reporting requirements. Some how or another they believe that these were worth over $1,500 a month in reporting for the amount in Box 12. I did the calculations and I did pay SS and Medicare on this extra amount. I checked previous years W2's and this was not counted as SS or Medicare Income, but now it is...

If this was new this year then there was no 2% break on SS deductions and SS / Medicare deductions have been pushed down to the lower income individuals even more now...

 

[FUEGO]

I glanced at my W-2 and I do not have a DD listed. IIRC as a company owner, health insurance is a different animal. Mine shows up in box 14. As an owner, I had to "pay" my health ins, and I was reimbursed as "other earnings", so the premium I payed was included in my year to date income. It was subtracted from gross pay to get "social security wages" from which my 401k contribution was subtracted to arrive at the box 1 wages number.

Its been like this for years. It doesn't look like it has caused me any tax disadvantages since it was a wash at the paycheck level and not in the box 1 number.

Not sure if you are in this boat, but at the firm I used to work, minority owners holding 2% or more of the company (an S-Corp) had the cost of health insurance included in their income somehow. One reason I never bought any company stock...

My stats for Box 12 DD: $5100 for individual only super crappy coverage by my governmental employer. I pay nothing and have never used the insurance but have heard horror stories and seen the co-pays and deductible on my health insurance card. $13430 for DW's box 12DD - gold-plated family coverage with zero deductible, low co-pays and 20% coinsurance. We pay $100/month on top of that cost. Given what some are reporting here, it seems DW's company is doing pretty well providing the quality of insurance at almost no employee cost. Could be DW's 1,500 20-something and 30-something coworkers balancing out the costs, along with RIF'ing all the old timers and outsourcing their jobs to India.

 

[WhoDaresWins]

This thread prompted me to open my W-2 today, which I received last week and had tossed aside for the accountant. I see $5200 in Box 12b (single person). I have no deductible or contributions for health insurance while I am working, but I will pay half of that amount when I retire. I do have to pay $20.00 as a co-pay for doctor's appointments. I plan to retire July 2014. Interesting that we did not get anything from HR informing of this new addition to W-2's.

 

[Ronstar]

Not sure if you are in this boat, but at the firm I used to work, minority owners holding 2% or more of the company (an S-Corp) had the cost of health insurance included in their income somehow. One reason I never bought any company stock...

My stats for Box 12 DD: $5100 for individual only super crappy coverage by my governmental employer. I pay nothing and have never used the insurance but have heard horror stories and seen the co-pays and deductible on my health insurance card. $13430 for DW's box 12DD - gold-plated family coverage with zero deductible, low co-pays and 20% coinsurance. We pay $100/month on top of that cost. Given what some are reporting here, it seems DW's company is doing pretty well providing the quality of insurance at almost no employee cost. Could be DW's 1,500 20-something and 30-something coworkers balancing out the costs, along with RIF'ing all the old timers and outsourcing their jobs to India.

That's exactly my situation. I started as a 15% minority owner in 1992. I believe we were a c-corp then. Switched to an s-corp maybe 2000. I believe we benefited somehow by doing this - I think it was by switching from accrual to cash base accounting - we were able to negate the tax consequences of increased accounts receivable during the boom years.

 

[ceciledian]

Total cost?

Is this the employer's total cost or does it include what the employee pays?

 

[REWahoo]

Is this the employer's total cost or does it include what the employee pays?

Q6. What amount should the employer report on the Form W-2 for health coverage? The amount the employer paid? The amount the employee paid? Or both?

A. In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee

Employer-Provided Health Coverage Informational Reporting Requirements: Questions and Answers

 

[Midpack]

Employer-Provided Health Coverage Informational Reporting Requirements: Questions and Answers

Though I have always wished Americans had a better grasp of what HC costs really are (vs their out of pocket costs) - it's hard to believe it's that simple (below), I am sure I'm not connecting the dots for what's to come (aside from taxable/non-taxable).

Q1. Does the cost of an employee’s health care benefits shown on the Form W-2 mean that the benefits are taxable to the employee?
A. No. There is nothing about the reporting requirement that causes or will cause excludable employer-provided health coverage to become taxable. The purpose of the reporting requirement is to provide employees useful and comparable consumer information on the cost of their health care coverage.

 

[imoldernu]

Employer-Provided Health Coverage Informational Reporting Requirements: Questions and Answers

That link and this one posted earlier, should answer most of the questions on the thread.
Form W-2 Reporting of Employer-Sponsored Health Coverage

That said, whenever "governmentese" enters the picture, ya always have to wonder about ulterior motives.

 

[MichaelB]

Though I have always wished Americans had a better grasp of what HC costs really are (vs their out of pocket costs) - it's hard to believe it's that simple (below), I am sure I'm not connecting the dots for what's to come (aside from taxable/non-taxable).

That link and this one posted earlier, should answer most of the questions on the thread.
Form W-2 Reporting of Employer-Sponsored Health Coverage

That said, whenever "governmentese" enters the picture, ya always have to wonder about ulterior motives.

Conspiracy theories about health care reporting?

 

[ducky911]

Still on payroll from former employer for consulting. My 12DD is $18,205.00. I think next year there may be a 12EE that says tax on 12DD!

Thats impossible...Pres. O says he will not raise taxes on middle class...I see just limit deductions that not raising taxes in DC talk....bunk

 

[Midpack]

Conspiracy theories about health care reporting?

Not at all in my case. I realize you know more about ACA than almost anyone else here, you're an admired resource.

It's just not clear to me how exchanges may factor in, and what dis/incentives employers who currently provide HC will have/not have to drop coverage and 'encourage' employees to use exchanges. And of course what HC will cost after 2014. How subsidies, exclusion (organized labor recent statements), uninsured (young & not), cost control measures (or lack thereof) will all shake out isn't as clear to me as it may to others. A lot of what I read is jumping to conclusions, at least I'm alert enough to recognize that.

Maybe I'm making this more complicated than necessary, but it doesn't seem so...

 

[samclem]

Conspiracy theories about health care reporting?

Denigration of observations consistent with the facts?

 

[Alan]

Thanks folks, we believe this thread has now run its course.

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