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Larry, I contacted my Congressman about House Bill 3590, the Health Care bill and asked for a summary of changes. The Aid directed me to go to http://www.thomas.gov/, enter "HR 3590" in the search box and look for "CRS Summaries."
Starting in 2011—next year—the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided.
It doesn't matter if you're retired; your gross income WILL go up by the amount of insurance your employer paid for. So you’ll be required to pay taxes on a larger sum of money than you actually received; take the tax form you just finished and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That's what you'll pay next year. For many it puts you into a much higher bracket. This is how the government is going to buy insurance for fifteen (15) percent that don't have insurance and it's only part of the tax increases, but it's not really a "tax increase" as such, it is a redefinition of your taxable income.
Not believing this I researched the CRS Summary and here's what found:
Title IX Revenue Provisions—Subtitle A: Revenue Offset
"(Sec. 9002) Requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is executable from the employee's gross income (excluding the value of contributions to flexible spending arrangements)."
Joan Pryde is the Senior Tax Editor for the Kiplinger Letters. Go to Kiplinger's and read about the thirteen (13) tax changes for 2010 that could affect you.
Why am I sending you this? The same reason I hope you forward this to every single person in your address book. People have the right to know the truth because an election is coming in November. So vote intelligently, based on your values. But also adjust your tax withholding, or increase your savings, so that you aren't surprised and put in a jam when your federal income taxes are due on April 15, 2012.
Larry, Do you agree with this assessment?James
James, Incorrect. Including the health insurance on the W-2 is correct but this is just for informational purposes only. You do not have to gross up into income… YET.Larry Kopsa CPA
Remember that our elected officials were told to pass the bill and then they could find out what is in it. Crazy way to create such a huge government program. We now know that in a couple of years you will be required to have health insurance. If you don’t there will be a fine that you will have to pay when you file your income tax return. The problem is that apparently there is no penalty for failing to pay this fine. Here is the wording according to Congress’s Joint Committee on Taxation:The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.Think about it. Without effective enforcement of the individual mandate, and with proscriptions against denying coverage on preexisting conditions, you've got yourself the potential for a pretty big moral hazard. A young person might just say, “I don’t want to pay the fine since there is no penalty and if I get sick they can’t deny coverage.” And remember… it is the IRS that has to make the determination.Pass the bill to find out what is in it. Or what ain't.Watch for our upcoming FREE WEBINAR on health care after we have had a chance to digest the new law.
Larry Kopsa CPA
'Health Care Bill Represents Change Nobody Believes In'(Wall Street Journal editorial) -- In its Dec. 21 editorial, The Wall Street Journal writes that the Senate health care bill "is so reckless that it has to be rammed through on a partisan vote on Christmas Eve." The editorial states, "Barring some extraordinary reversal, it now seems as if (Senate leaders) have the 60 votes they need" to approve "the 2,100-page bill." The editorial notes a cost analysis that was recently released by the insurer WellPoint, finding "that a healthy 25-year-old in Milwaukee buying coverage on the individual market will see his costs rise by 178%. A small business based in Richmond with eight employees in average health will see a 23% increase. Insurance costs for a 40-year-old family with two kids living in Indianapolis will pay 106% more." The editorial predicts "steep declines in choice and quality," resulting from actions such as the health care bill's "$2 billion annual tax — rising to $3 billion in 2018 — that will be leveled against medical device makers, among the most innovative U.S. industries." Finally, the bill will "blow up" the federal deficit, the editorial states. "Even though Medicare's unfunded liabilities are already about 2.6 times larger than the entire U.S. economy in 2008, Democrats are crowing that ObamaCare will cost 'only' $871 billion over the next decade" as it "sets up government-run 'exchanges' that will subsidize insurance for those earning up to 400% of the poverty level, or $96,000 for a family of four in 2016." <http://online.wsj.com/article/SB10001424052748704398304574598130440164954.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop>
'Governor: Health Care Bill Represents $624 Million in Unfunded Mandates for Neb.'(Governor's release) -- On Friday, Gov. Dave Heineman sent a letter to Nebraska’s U.S. senators and congressmen regarding the health care reform proposal being considered in the U.S. Senate. The Governor's letter reports that one version of the Senate health care bill would create an estimated unfunded mandate of more than $127 million during the bill's first five years. If the state provided optional expanded coverage during FY 2011-13, costs to the state would total more than $497 million, for a combined total exceeding $624 million. See the release at <http://www.governor.nebraska.gov/news/2009/2009_11/20_health_care_bill.html>
