Health Care Reform 2014 Question & Answers
What extra taxes will be due from the health care reform bill?
Is it part of health care reform that 2011 w2 will report health ins.benefits as income. If a company says their contribution to your health care pkg is $4500.00 yr, that figure is added to gross salary. This may cause an increase in payroll taxes. Is this true?
Sarah Fields answers:
No, the amounts that are paid by your employer for health insurance coverage will NOT be included in your gross income. This is a common but utterly false claim by the extremists on the right. This will be included as an item in box 12 of Form W-2 beginning in 2011. It’s there primarily for information purposes initially. In later years you’ll be able to use that information to comparison shop for better coverage from other sources.
There is an excise tax on certain “Cadillac” health insurance policies. Typically those policies cover 100% of all healthcare costs and often cover elective procedures that are not medically necessary. That excise tax will be paid by the INSURANCE company, not the employee or the employer.
Eventually (2014 or so) a refundable credit will be included that will help you to defray the cost of health insurance and other health care costs that you pay out of pocket. While THOSE details are yet to be worked out, you will NOT see an increase in your tax liability as an individual as a result of the healthcare reform bill. The worst case scenario for an individual will be the loss of that refundable credit if you don’t have health insurance coverage but could afford to get it. If you want to call the loss of a refundable credit a “fine” then fair enough.
Small businesses will be eligible for refundable credits to assist in defraying the cost of health insurance coverage for their employees. Again, the fine details are yet to be worked out but it will be another 3 or 4 years before this kicks in.
SOME businesses may see an increase in their taxes if they refuse to offer reasonably priced health insurance to their employees. This will be limited to larger employers such as Wal-Mart who traditionally avoid offering benefits to lower-paid and part-time employees. If Wally World continues on its current track, it may see substantial increases in its tax bill. Those taxes are what will fund the refundable credit for individuals and the credits for smaller businesses.
Just to repeat the most important point: You will NOT pay higher taxes due to the healthcare legislation if you are an individual taxpayer and/or operate a small business.
What if people can’t afford health insurance but they have to have it with health care reform?
Is that possible? I’m in favour of a health care reform, but my MIL is commenting that there will be people who can’t afford to feed their kids because health insurance will be a new cost they can’t afford. Will that actually be the case? I’m trying to find info on if that’s a viable situation, or something to disclaim it, but if someone else has an answer for me that would be swell too.
Sarah Fields answers:
The above answer makes it look like the subsidy and the tax credit are two separate things when in reality the subsidy is the tax credit. How it will work is you’ll be required to purchase a policy starting in 2014. You will pay for the policy during the year. When you file your 2014 taxes you will receive the subsidy as a tax credit, which for most people will result in a higher refund.
So, MIL is partially right in that you must first fork over the cash for a year, then you’ll get you subsidy.
Can we start the wagers now on when the “Health Care Bill” starts adding to the Deficit?
I wanted to start a Betting Pool,with bets on when the supposed health care reform starts adding to the deficit.
I choose day one,since any money they take in for it between now and implementation in 2014 will already be spent by then.
Sarah Fields answers:
Count on it they lie to the CBO and even if the figures are true does anyone think the government will cut 500 billion in Medicare if all those saving were there why did it not get cut last year? If this stands as Is it will bankrupt the country and that is a fact.All the entitlement programs are ten’s of billions in the whole already add this one on to it bankruptcy is in our future.
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