White House Will Delay W-2 Insurance Reporting Requirement

CongressDaily reports that the Obama administration announced Tuesday it will delay for one year a provision of the health law that requires employers to report the value of an employee's health plan on tax forms. The White House says the extra time is necessary to give employers time to prepare to comply with the requirement. "Under the overhaul law, all employers who provide health insurance are required to include the information on workers' tax forms after 2010. But instead of a mandatory reporting requirement, the IRS' draft 2011 W-2 tax form includes an optional line for employers to report the cost of employer-sponsored health insurance coverage." People do not have to pay taxes on their health insurance (McCarthy, 10/12).

The Hill: "And in a blog post Tuesday, Stephanie Cutter, the administration's head of healthcare reform messaging, shot down one persistent rumor: that information about health benefits added to employees' tax forms will translate into higher income taxes. That, she said, is not true. Employers have the option of adding the value of the plans to 2011 W-2 forms and will be required to do so in 2012, but the goal is to inform employees about their benefits, not tax them." Starting in 2018, however, "the law does create an excise tax on high-cost healthcare plans. Starting [that year], so-called 'Cadillac plans' will be subject to a 40 percent tax on excess benefits. … The law defines such plans as costing more than $10,200 a year for individuals and $27,500 for families, with higher thresholds for risky professions such as firefighters and miners" (Pecquet, 10/12).

Related, earlier KHN story: 'Cadillac' Insurance Plans Explained (Gold, 3/18)