According to a report I read from Kiplinger, starting in 2011, the cost of employer-provided health insurance will be reported on your W2 form. However, these costs will NOT be taxed as income – they are only being reported.
Apparently the idea is to give employees a better idea of how much money their employers are spending on them aside from wages. If that is the case, I’d say be prepared for additional items being reported that some employers pay for, including:
- FICA
- Dental Insurance (if it is not included in the health insurance)
- State and Federal Unemployment Taxes
- Contributions to Pension / Profit Sharing plans if not already reported
- Life Insurance Premiums not currently being reported
- Classes, CPE and other courses taken that the employer picks up the tab
- Reimbursements to employees such cell phone reimbursements, travel, meal allowances, etc.
I agree with employers telling employees how much aside from salary is being paid out. At some places I’ve been associated with, an employee is given a printout showing how much they will make with their salary (or raise/bonus) and on that sheet is the amount that will be paid in benefits.
However, don’t think this is an easy thing for employers. Not all employers keep track of every benefit paid by employee. Now, the employer will need to keep records in order to keep in compliance with IRS guidelines. There are additional costs for record-keeping…
If you have any comments or questions – please let me know!
Cheers!
Tom
I wonder if this record keeping may be used in the future to determine each individual employers “contribution” to the public option plan. Seems odd to me that they would do this just so employees will appreciate their employer more.
Or it could be a scheme to create work to enrich CPA’s. Just a thought!!!! Keep up the good work!
Interesting thought – thinking a good CPA can develop a low-cost easy system for small employers using a spreadsheet.
My employer, Wellpoint/Anthem already does show us how much the are so “generously” giving us on our health insurance benefits, life insurance, dental, etc. We have suspected for awhile that they might eventually start taxing that as “income”. Glad to hear for the moment they are not.
It would push me into a totally different tax bracket with only “funny money” to show for it.