<p>This is 12d on a w2…</p>
<p>“Code D – Non-taxable elective salary deferrals to a 401(k) or SIMPLE 401(k) retirement plan.”</p>
<p>This is supposed to be 12dd…</p>
<p>“DD Cost of employer sponsored health coverage”</p>
<p>SamuraiLAndshark, I find your posts very balanced and informative. I appreciate the posts.</p>
<p>" total per month for both, $1425, pre-tax."</p>
<p>Ok, gotcha. So on the exchange it’s about $250 more a month. I wouldn’t call that way more expensive - especially for someone who can afford such an expensive plan to begin with. But point taken. </p>
<p>I think most of us, if we had to get an insurance plan on the exchange we would sign up for bronze or silver plans.</p>
<p>“busdriver - doesn’t your company self insure? I thought you mentioned that before.”</p>
<p>Yes, they do. They get Blue Cross to do the administrative work. But it sure doesn’t seem like it should be so massively discounted. We have a lot of unhealthy people who work for my company!</p>
<p>“If you see the Box 12, DD information, you may have to do some extra work to figure out what your employer’s cost was. You may need to look at your final pay stub from 2012 and subtract what you paid for your health insurance from the new DD amount. The difference is your employer’s share.”</p>
<p>That’s the article I read, saying Box12dd was both the employee and employer cost of health coverage.</p>
<p>“Yes, they do. They get Blue Cross to do the administrative work. But it sure doesn’t seem like it should be so massively discounted. We have a lot of unhealthy people who work for my company!”</p>
<p>There has to be a pretty big economic benefit to a company to self insure. Why else do it? But I’m not an expert in the financial benefits of self insuring, so just speculation on my part.</p>
<p>If your numbers are correct busdriver11, we can see why a company self insures. </p>
<p>People who are employed tend to be healthier than those that are not. That is a big difference in costs though… Your plan for a family in the individual market is going to be pretty expensive.</p>
<p>“It looks like there will be another wave of disappointment when the website is finally fixed and running. Anyone between 28 and 49 and 51-64 will find their premium went up from previous quote.”</p>
<p>You can go on Healthcare.gov and see all the plans in every state and the cost it will be for someone your age. </p>
<p>I did it the other day.</p>
<p>I would say that anybody that works for a company that self insures and can offer insurance for 12,000 that would cost 20,000+ is probably safe from any healthcare changes. But…maybe those self insured companies are the most aggressive in cutting costs… And will be aggressive with employees.</p>
<p>I think the odds are you are safe…</p>
<p>Safe means increases of 7.5 percent a year or so…just getting that idea from CF’s Milliman link.</p>
<p>I think the companies portion of our health insurance is only about 7.1K/yr. I’m not sure if I could find a similar plan, for anything not cost prohibitive, in any state. I assumed it was a Cadillac plan until I looked at the cost. Companies are always trying to lower costs, and go after health insurance, but they’ll have a tough time with our collective bargaining agreement. Those employees that are not part of a union have already lost the same great insurance that they had, moved to a lesser plan that cost more.</p>
<p>It seems to be far more cost effective for a company to self insure, if they can.</p>
<p>You find a similar plan with similar costs in the individual health insurance market and you tell people, you are going to make lots of friends. </p>
<p>That policy you have is worth a lot of money. </p>
<p>There are millions of people that work 40 hours a week that make less than that policy is worth.</p>
<p>Any job openings? ;)</p>
<p>“I would say that anybody that works for a company that self insures and can offer insurance for 12,000 that would cost 20,000+ is probably safe from any healthcare changes”</p>
<p>Also, if a company self insures they do not need to make a profit from the insurance. Insurance company’s prices include the profit they make, no - which increases the cost one pays.</p>
<p>“Code DD – Reports the cost of non-taxable health insurance provided through your employer.”</p>
<p>[Codes</a> for Form W-2 Box 12: Explanations of Form W-2 Box 12 Codes](<a href=“http://taxes.about.com/od/formw2/a/IRSFormW2_5.htm]Codes”>What Is Form W-2?)</p>
<p>"Why Do Employers Self-Insure?</p>
<p>There are a lot of good reasons to self-insure, like:</p>
<pre><code>More control over plan design: Commercial insurance companies usually offer set packages of benefits. By self-insuring, employers can tailor a plan for their workers that they may not be able to buy “off the shelf.”
Cost savings: Self-insured plans are not commercial products, so they have different types of costs. They don’t need to build in extra charges for profits, or taxes.
Better cash flow: In a self-insured plan, the employer pays the actual cost of care instead of a fixed monthly premium. With a commercially insured plan, the employer pays the same premium even if members use less care one month than predicted. So, in that case, the insurance company would set aside the difference for future months when costs might be higher. But in a self-insured plan, the employer holds on to that extra money."
</code></pre>
<p>[Insured</a> vs. Self-Insured Plans - FairHealth Educational Site](<a href=“http://www.fairhealthconsumer.org/reimbursementseries/insured.aspx]Insured”>http://www.fairhealthconsumer.org/reimbursementseries/insured.aspx)</p>
<p>"There are millions of people that work 40 hours a week that make less than that policy is worth.</p>
<p>Any job openings?"</p>
<p>Yep, plenty of job openings. Unfortunately, most of them are low paid, physical, part time workers. But part timers get full benefits, including health insurance. Though they just got their insurance benefits slashed (non-union), it’s still far better than going on the exchange.</p>
<p>
</p>
<p>Actually the differential is less than that. The W2 shows the amount that Samurai’s employer paid in 2012, whereas the exchange shows premium costs for 2014. </p>
<p>So if we assume a [4%</a> increase per year](<a href=“http://www.pbs.org/newshour/rundown/2013/08/how-quickly-are-health-insurance-premiums-rising.html]4%”>http://www.pbs.org/newshour/rundown/2013/08/how-quickly-are-health-insurance-premiums-rising.html), then Samurai’s 2012 $1425 would be $1571 in 2014. </p>
<p>I’d also note that Samurai gave figures for a family of 5-- the income threshold for subsidies for that family size is over $110K, well above median household income. A family with the $110K income would pay $871/month for insurance. </p>
<p>I’d also point out that for a family earning, say, $115K a year, that $1666 premium represents about 17.4% of household income – well above the 9.5% threshold, but probably not wholly unaffordable. As Samurai already pointed out, if the family itemizes deductions, the amounts over 10% of AGA are deductible – so for that hypothetical family with $115K income, there is an additional $4,992 insurance writeoff. Because of the high California state income tax, that probably translates to a roughly $2,248 tax reduction (ballparking the state & federal combined marginal tax rate at 45). If you factor the tax reduction in, then the net monthly premium cost to the family is $1479.</p>
<p>Also, Samurai was looking at a premium plan (Gold level) – it’s wonderful that Samurai has such good employer coverage, but the exchanges are structured to encourage most families to go for the Silver level, with a lower premium. As I’ve pointed out before, most of the potential benefits of the the higher metal tiers are factored into premium levels, so most families would be better off opting for the lower cost Silver or even Bronze. (A Bronze HSA is a good deal for families who tend to have very low health care usage and some discretionary income, because of the additional tax benefits of the HSA. I don’t know what numbers Samurai plugged in to get the premium, but it would be interesting to see how the premiums for Silver & Bronze compare)</p>
<p>“Actually the differential is less than that. The W2 shows the amount that Samurai’s employer paid in 2012, whereas the exchange shows premium costs for 2014.”</p>
<p>Good point.</p>
<p>Busdriver, I don’t understand your numbers. You posted before that your company was going to reduce benefits because of the higher tax kicking in down the line for Cadillac plans, but the premium dollar amount you posted doesn’t sound like Cadillac territory - it would have to be $27,500 for family coverage to be taxed. (Or are you the only one covered? For self-only coverage, the threshold is only $10K)</p>
<p>^^They won’t reduce benefits for me, just for non-union employees (which there are plenty of). I don’t think they have a leg to stand on, claiming they are reducing benefits to avoid the Cadillac tax, which certainly they aren’t close to. Perhaps the single coverage is what is driving it, perhaps it isn’t considered to cost much less than family coverage. But it can’t be near the 10K either, perhaps considering for inflation and future costs, that would be a factor. I think it’s just an excuse to lower benefits, really. But I can’t see why 10K would have been declared as a Cadillac plan for single people, that’s not so much, in many areas of the country.</p>
<p>I see that article I quoted about the 12dd being both employer and employee costs must be wrong, it conflicts with the other info listed here.</p>
<p>
That would equate to $833/month. Because it is an employer group plan, it is not tied to age level. Average benchmark Silver plan in California for 45-year-old is $325 a month – so on an individual level, that would be more than twice the average in a high cost state.</p>
<p>Seeing as the Cadillac tax doesn’t kick in until 2018, it is logical, with the price of health insurance no doubt increasing every year (especially as people without subsidies don’t sign up in great numbers), that it could be fairly easy in some states for people’s individual plans to near/go over 10K. I could be wrong, but I seem to recall that 40-50% of employer paid plans are considered Cadillac plans, which would be a very large number of plans to tax 40% over the limit for. I doubt these plans are gold plated, fancy plans, just comprehensive with lower deductibles and higher payouts.</p>
<p>So where will the money come from? Companies lower their plan benefits, make employees pay more= greater profits. Employees pick up the extra costs, with no additional money in their paychecks. Employers write off less on their taxes, with more revenue going to the IRS. Lower income people get their subsidies, the amount of money involved is too low to affect the higher income people, middle class people who have employer based insurance (vast majority of them) pick up the slack.</p>
<p>And next year…premiums will keep on rising. People aren’t going to turn down employer based insurance to get a subsidy on the exchange, even lower benefits will be better than the ones the exchange offers.</p>