TaxesTax Filing W-2 Forms Now Detail Health Care Costs <\/p>\n
Have you taken a good look at your 2012 Form W-2? If you get health care coverage through your job, then you probably noticed a new amount in box 12. <\/p>\n
That figure reflects how much you and your employer spent on your health insurance premiums last year. It's a new reporting requirement of the Affordable Care Act, often referred to as Obamacare, and it applies to most companies with 250 or more workers. Next year, smaller companies also will have to report their workers' health care costs on their annual earnings statements. <\/p>\n
Depending on your coverage, the options you chose or even where you live, the amount on your W-2 form could be in the five-figure range. A 2012 Kaiser Family Foundation survey found that the average family received $15,745 in health care coverage.The numbers from the actuarial firm Milliman are higher; its 2012 analysis found medical coverage for a family of four cost nearly $21,000. <\/p>\n
But don't panic if the amount on your W-2 form is large. The money shown in box 12, designated by the description code DD, is not taxable income. <\/p>\n
When health care reform was being debated in 2010, lawmakers decided to add the reporting requirement so employees would know the exact costs of their workplace-provided medical plans. The idea is that workers, armed with the cost information, will shop for more economical coverage that meets their medical needs. <\/p>\n
What isn't counted: The W-2 amount, however, doesn't show all your health care costs. It only covers the premiums you and your employer paid. To determine how much of that you paid, pull out your final 2012 pay stub and subtract the final amount shown for your portion of health care premiums. <\/p>\n
The box 12 amount doesn't include any contributions you made to special health care plans, such as a medical flexible savings account, Archer Medical Savings Account or health savings accounts. Nor does it take into account additional payments you made for separate dental and vision plans, co-payments, deductibles or other out-of-pocket health care expenses. <\/p>\n
While the added reporting requirement is a bit more work for employers or the payroll companies to which they outsource the job, most companies have no problem with sharing the data. The amount spent on this employee benefit could help employers justify why pay raises are smaller than workers would like; the company money is going into health care coverage instead. <\/p>\n
Possible future tax resource: The overall amount of nontaxable health care coverage also is of interest to Capitol Hill. <\/p>\n
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