Battle of the Bilge

Additional Confirmation

As there were questions raised by the previous post regarding an increase in taxes due to health care costs being required on the next W2 that we rated as false, we have been waiting for other outlets to discuss the email.

From PolitiFact, which rated the email ‘Pants on Fire’:

The chain e-mail is correct that employers will be required to start listing the cost of insurance. The requirement starts for the tax year 2011, so employees will see it on the W-2s they receive in 2012.

But that amount will not be taxed. Current law excludes health insurance from taxable income, and there’s nothing in the health care law that changes that.

Several experts on health care benefits and the workplace confirmed that. “It will not affect your taxable income under the new law,” said Dallas Salisbury of the Employee Benefit Research Institute in an e-mail interview.

Since the health care law actually continues the tax exemption on employer-sponsored insurance, why include a requirement that employers report the value of health insurance on the W-2? There are several reasons.

The new health insurance law will eventually penalize people who are not insured with a tax penalty. The W-2 reporting requirement will help the Internal Revenue Service verify that people have coverage, both for themselves and their dependents.

We’ll keep you up to date and add to this post as other fact check outlets examine the issue.

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