Health care insurance costs now on W-2

[MichaelB]

Beginning this year, employee's W-2 forms will include the total cost of health insurance. It will be interesting to see how people react when they see this.

The New York Times: To Open Eyes, W-2s List Cost Of Providing A Health Plan

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. ... 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 (Pear, 1/29).Tax Forms To Include Health Insurance Cost Info -- Per Health Law Requirement - Kaiser Health News

 

[nun]

Yep, just got my W2, Box 12 DD is $5170.......plan is for a single person, no deductible, but I pay $250 for hospitalization and the first $250 of tests. My premium is $85/month. Until very recently would have been eligible for retiree healthcare from age 55 getting the same plan for the same premium. But that is going to be changed so I'll have to work until 62 to be eligible and my premium go to 50% of the cost. But I can still ER and be guaranteed a 2k/4k plan through The Connector website for $350/month. Not nearly as good, but not terrible either.

 

[retire2020]

Just checked mine...Phew! Box 12 - DD is $17214.12. We're a family of five and company deducts 566.70/month from my paycheck.
I can not believe the total cost! I hope Obamacare brings it down to make ER a reality for me.

 

[audreyh1]

Wow - this is a great thing. No longer hidden under the rug and ignored.

 

[ziggy29]

Just checked mine...Phew! Box 12 - DD is $17214.12. We're a family of five and company deducts 566.70/month from my paycheck.
I can not believe the total cost! I hope Obamacare brings it down to make ER a reality for me.

What I don't get is that in open enrollment last year, the stated "company cost" of all health benefits was about $8,500 a year. But Box DD shows nearly $13,000 for me -- and that's with an HSA-eligible HDHP...

 

[timeasterday]

Just looked at my W2 and it says $12,683.47 in that box. But what do I do with this info? Is it useful?

 

[REWahoo]

What I don't get is that in open enrollment last year, the stated "company cost" of all health benefits was about $8,500 a year. But Box DD shows nearly $13,000 for me -- and that's with an HSA-eligible HDHP...

Did the $4,500 difference come out of your check?

 

[ziggy29]

Just looked at my W2 and it says $12,683.47 in that box. But what do I do with this info? Is it useful?

Not yet. But it may be used in the future to determine taxes on "Cadillac" health plans and who knows what else. Right now it's not used for anything in terms of taxes.

 

[ziggy29]

Did the $4,500 difference come out of your check?

Nope -- I was paying around $150 a month out of my paycheck. It's possible they added the $1,000 company contribution to my HSA but that doesn't even account for 1/4 of the discrepancy.

It may also include what they paid for dental and vision, but again, that's still nowhere near $4,500 a year. Maybe if you include it *all* -- my premiums, the company HSA contribution and dental/vision, you start to get close.

 

[MichaelB]

What I don't get is that in open enrollment last year, the stated "company cost" of all health benefits was about $8,500 a year. But Box DD shows nearly $13,000 for me -- and that's with an HSA-eligible HDHP...

Did they change plans?

From the NYT article, the intent is to show the total cost, not just the employer net cost.

The number on the W-2 form is supposed to reflect the part of the cost paid by the employer and the part paid by the employee.

 

[Semiretired2008]

Sounds like a potential build-up for when and if they decide to start taxing it...

 

[Brett_Cameron]

Interesting. I retired in 2011 but received incentive bonus from the ex-employer in 2012. I got a W-2 showing the incentive bonus and with the Block 12 code DD amount of $16,176. I also received a form 1099-R for the pension from ex-employer. The 1099-R does not have a place to report cost of health care insurance.

I wonder if in the future that I will get a W-2 from ex-employer with all zeros except for the DD coded amount for the retiree health care.

Also, I am not sure the $16,172 is just for the medical insurance plan or if it also includes the dental and vision plan premiums.

Edit: I believe the amount is for medical insurance only, since I pay exactly 25.00% of the DD amount as my part of the premium.

 

[rodi]

Interesting. I hadn't noticed this.

my w-2 states 12143.52 - that's for Kaiser Permanente HMO. I'm fortunate to only pay $3504 of that.

It matches the company cobra rates for the same plan (I always use those figures for my retirement budgeting. - I've got a $10k additional budget item for increased insurance premiums.)

The $12k does not include dental. (I'm hoping to stay employed long enough to get the braces close to completion - insurance covers some, but more importantly, has much cheaper negotiated rates for orthodontia.)

 

[rodi]

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.

 

[gerrym51]

Just checked mine...Phew! Box 12 - DD is $17214.12. We're a family of five and company deducts 566.70/month from my paycheck.
I can not believe the total cost! I hope Obamacare brings it down to make ER a reality for me.

i will get shot for this. Obamacare is not bringing cost down

 

[gerrym51]

Just looked at my W2 and it says $12,683.47 in that box. But what do I do with this info? Is it useful?

i believe Obamacare taxes cadillac insurance plans

 

[travelover]

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.

 

[Gotadimple]

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.

True. But left pocket - right pocket. You would just pay taxes on something else.

Rita

 

[audreyh1]

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.

That's right - pretty big disconnect.

 

[audreyh1]

True. But left pocket - right pocket. You would just pay taxes on something else.

Rita

Uh, no, not in this case.

 

[travelover]

True. But left pocket - right pocket. You would just pay taxes on something else.

Rita

I'm slow this AM. Can you explain a little further?

 

[Midpack]

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]

 

[Accidental Retiree]

Sounds like a potential build-up for when and if they decide to start taxing it...

My thoughts exactly. Get the mechanism in place....

 

[ziggy29]

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.

 

[seabourne]

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)