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What's that new box on your W-2? And why is it there?
Posted: 01.30.2013 at 5:18 PM
Norm Van Ness

Norm Van Ness is the Chief Meteorologist at WNWO.

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Workers will see something new on their W-2 statements when they get them from their employer this month.

It's Box 12..."cost of employer-sponsored health coverage".

In other words...your employer's contribution to a health care plan on your behalf.

Box 12 is a direct mandate as dictated by the Affordable Care Act, otherwise known as "Obamacare".  And it's reasoning is up for debate.

Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commercetold the New York Times, “It’s useful for employees to know the value of coverage their employers provide.” But she said some employers worried that reporting the benefit on the W-2 form could lead to taxing the benefit."

“That’s not the intent of the current requirement,” Ms. Mahoney said. “But once the information is collected by the government, it’s very easy for another administration to have a different intent.”

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction to the New York Times 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.”

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, told the Times, “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.”

The disclosure requirement, which was proposed by a bipartisan group of senators: two Republicans, Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, and two Democrats, Max Baucus of Montana and Ron Wyden of Oregon.

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.

Is the government forcing employers to report how much they spent on your health plan designed to give you more info?  Or do you think they are setting up to eventually show that as income and tax you on it?

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