<p>“Reporting on the Form W-2
The value of the health care coverage will be reported in Box 12 of the Form W-2, with Code DD to identify the amount. There is no reporting on the Form W-3 of the total of these amounts for all the employer’s employees.
In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. See the chart, below, and the questions and answers for more information.”</p>
<p>^^That’s interesting. If that is so, then the total cost for a single person for my employer paid plan is about 5.2K/yr, which isn’t even close to the Cadillac limits. Why they would claim they have to lower benefits to duck the tax is beyond me…well actually, I know why they did it. I guess they thought nobody would look at their W2’s.</p>
<p>Busdriver, if your company is self-insured, then they don’t pay a premium. I think they just report the average health care expenditures per employee – so that may be why the number is so low.</p>
<p>"(especially as people without subsidies don’t sign up in great numbers),"</p>
<p>I think most people will sign up. I think most who have had insurance who are saying they will just pay the penalty is mostly bluster. These people already understand the risk of going without insurance - especially when the penalty goes up to 2.5% of your income in a few years with the addition of a COL every year after that. </p>
<p>They may not purchase their insurance through the exchanges but, imo, they will purchase it - just like the people in Massachusetts have under Romneycare.</p>
<p>texas, they were nearly identical plans, but yes, they are separate. They can unilaterally change non-union plans at will, but the union plan has to be negotiated.</p>
<p>All employers should do that then. $5-6K is only about a third of the average premium. If we can all do that, we don’t have a health crisis. This also contradicts that medical care is expensive.</p>
<p>In SamuraiLandshark’s example, the premium is only going up about 17% for a roughly equivalent plan assuming the network availability is about the same. That’s not so bad. But how about the others who traded in for a less desirable plan for a lower premium? They at least had an insurance, desirable or not. Earlier someone mentioned, they have to pay about $1,500 in the exchange instead of about $700 for their present plan. That is a huge increase and understandably they are upset. If they are above 400% poverty level, they are in a tough spot. If they lowered their coverage to save on the premium, they are probaly less well positioned to absorb the increased ACA premium.</p>
<p>If we lose our Kaiser coverage, we will go to the cheapest plan, possible. </p>
<p>“Affordable” is relative. With one child in college, paying parent PLUS loans and digging out of debt that remained from when family lost income for two years - I simply do not have nearly $2,000 in income leftover after taxes and expenses. One of the reasons my family is considering relocating is due to financial reasons. We need to save money, not only for monthly expenses but just to recover what we lost in wages and get some security back. </p>
<p>The cheaper Kaiser plans, I do not think we would jump through the hoops they require if we had to pay 30-40% of fees in deductibles plus monthly premiums. We would probably buy off exchange. </p>
<p>I also realized I input wages. Not modified AGI. That might impact if eligible for subsidy. One of downsides to taking one is that I have a job plus self employed. My husband has the family insurance plan. My income is variable and yo yos year to year.</p>
No Igloo, we only have Busdriver’s insurance figures for a single year. Because they self-insure, there is no particular reason to think that their insurance is the same from one year to the next – it could be a matter of luck. </p>
<p>Obviously if they do self-insure, they have cut out the middleman – they don’t need any margin for profit on premiums. So you would expect that the overall costs would be somewhat cheaper, probably in the range of 5-10%, simply because of that factor.</p>
<p>Ok… I talked to a friend who told me he pays 350 a month and his very large company pays 350 a month for a family of 4. Turns out it is double what he told me (the plan is paid for twice a month). Includes dental. Super plan. </p>
<p>Better than you can buy on any change plus it is before tax dollars and not after tax dollars that pay for the insurance and he doesn’t have to pay taxes on the company’s share of the premiums.</p>
<p>So he has the company paying about 700 a month of his costs. Not as inexpensive as busdriver11’s plan costs but still great.</p>
<p>busdriver, do you have previous years’ figures?</p>
<p>If busdriver’s company has a sizable employees, I’d expect the year to year fluctuation is not extreme. If their medical expenditure is twice as much some years, it is still only 60% of the average premium.</p>
<p>Samurai, as the law is presently worded, every above-the-line tax deduction on your 1040 remains when you are calculating AGI. You figure MAGI by starting with the AGI shown at on the front, bottom, of your 1040 - and add back only 3 things: any untaxed dividends, Social Security benefits, or foreign earned income. </p>
<p>PLUS loans & kids in college? That means that you may have a college tuition deduction and student loan interest deduction reducing income. Self-employed? If your husband were to lose his job, that might mean that you could deduct the full premiums paid for insurance. </p>
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<p>Buying off exchange would be a mistake if you think there is even a remote possibility that you would qualify for a subsidy in any given year. The plans are the same on or off exchange (same premiums), but you have to be on the exchange to qualify for a tax rebate or subsidy. Admittedly it is a pain to sign up on the exchanges right now, but that’s a time-limited issue-- they will work out the kinks, and if it drives you nuts, you can just find an insurance agent to take care of the sign up for you. (Insurance agents do get commissions – the agents are frustrated right now because the professional software interfaces created for them are also buggy, but they’re taking paper applications from clients.)</p>
<p>I don’t see anything in that block on the W2 for 2011 insurance, igloo. Wasn’t it 2012 that they had to put it there? I also don’t know if the costs would vary that greatly, except for fluctuating numbers of people covered and increasing health care costs. Don’t even companies that self insure have additional insurance for very expensive events, kind of like insurance companies that buy insurance?</p>
<p>So Dstark - I’m confused - is your friend paying $350 a month or $700 a month (which is how I would interpret the twice a month deduction) - along with his company paying $700 for a total of $1400/month for his coverage - which would be about $16.8K a year, no?</p>
<p>The State of NJ self insures and we now pay up to 35% of the so called premium. I am concerned because what happens when the HC fund is over budgeted do I get a refund on my contribution?</p>
<p>One year the State balanced its budget by taking $100 million from the health care account which they claim was a surplus.</p>
<p>Calmom,
Thanks for advice. We do take PLUS interest deduction plus whatever is allowed based on income for student tuition. </p>
<p>I miscalculated - our MAGI is closer to the 100,000 range. Theoretically, subsidies might be a possibility. Writing off premiums might be a possibility for self employment, but I rarely make more from that income than the premium costs. It might be more logical as a regular medical deduction. </p>
<p>There are a lot of variables for many folks and so much can change year to year.</p>
<p>Yes and no. Employers with large workforces were the first to switch to self-insurance, and many did. I believe the most recent figure is that 59% of all employees with employer-sponsored coverage are actually in self-insured plans. Most don’t know it, however, because those employers typically contract with insurance companies to administer the plan (“third-party administrators”). So the employees think they’re signing up sign up for, say, BCBS or Aetna insurance coverage, but BCBS or Aetna is really just doing the paperwork and supplying its own provider network–or sometimes, organizing a separate provider network for a “plan” tailored to the specifications of the self-insuring employer. The “middleman” isn’t cut out entirely; the insurance company still gets paid a fee to do all the administrative work. But ultimately the bills are paid, and the actuarial risk is borne by, the self-employing insurer. Most employees will likely be oblivious and think they’re “insured by” BCBS or Aetna, when in fact all that company is doing is processing claims.</p>
<p>For a big company with a large workforce and ample cash reserves, self-insurance isn’t a problem, because the actuarial risks should approximate those of the public generally (or differ in more or less predictable ways depending on the average age of the workforce, occupationally related risks, etc.).</p>
<p>For a smaller company, self-insurance is riskier; unexpectedly large claims in a single year or over a period of years could put the business at risk. But the employer can reinsure against this risk by buying so-called stop-loss coverage, which is essentially just insurance against unexpectedly large insurance liability, above a predetermined threshold. The employer needs to pay a premium for the stop-loss coverage, of course, but then the ultimate risk of unexpectedly large claims falls on the reinsurer that sold the stop-loss coverage.</p>
<p>With this type of arrangement, even a lot of smaller businesses have switched to self-insurance. The tricky thing is, though, reinsurers won’t sell stop-loss coverage to just any businesses. They’re looking to “cherry-pick” the companies with the youngest and healthiest workforces, because the risk that they’ll need to make a big payout is smaller. So among smaller companies, it’s generally those with younger and healthier workforces that have been able to switch to self-insurance. This leaves the employers with older and sicker workforces in the conventional market for commercially available employer-sponsored health insurance, diving up the cost of such conventional plans. This is a non-trivial factor driving up the costs of conventional employer-sponsored health insurance.</p>