Health Care Reform Question?

[frankly_fedup2]

If your employer pays for your healthcare, is that amount added to your income to be taxed by the end of the year?

[Enrique]

1. no

there's an excise tax on high cost plans, but nothing gets added to income for income tax.

[frankly_fedup2]

2. could you break that down a little more for me. What do you mean High cost plans and what is an

excise tax for?

[Enrique]

3. I'm not sure of the threshold

I know I don't have one, but I think I used to when I had a union job. Cadillac plans, very good expensive health plan.

The tax is a percentage of the cost of the plan exceeding the threshold.

[James48]

4. Good reference materials on Health Care

Take a look at this site:

http://healthreform.kff.org/

and especially the timeline here:

http://www.kff.org/healthreform/8060.cfm

You asked "What do you mean High Cost plans, and what is an excise tax for?"

High cost means a family plan that costs over $27,500 in January of 2108. Those plans that cost more than that, on that date, will be subject to an excise tax on the excess.

The purpose of the excise tax is to provide an incentive for expensive plans to begin to control costs, and to ensure that exorbitant plans are not given the same tax advantage and tax deductibility as normal plans. If you are going to get a $27,500 plan, that is way higher cost than most, and therefore should not be treated with the same tax benefit.

[REACTIVATED IN CT]

5. Starting in 2011, employers will have to put the cost of

healthcare on the employee's W2s. It won't be taxed, though. The "cadillac plan" tax starts several years later, IIRC.