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So, if you get your health insurance through your job, are you going to end up getting taxed on that?

08-17-2017 by Colleen King

People don't always realize that when an employer pays some or all of the cost of their health insurance through work, the 'money' that is spent on the health plan is not considered taxable income to the employee. Congress, in the 'rush' to reform Obamacare and find funding for whatever they eventually come up with, is talking about removing the employer exemption and taxing YOU for what is being paid on your behalf.

And there's more than this involved--so if this happens, that increases your taxable income, and your employer's payroll taxes. Further, many times when people have their families on the group plan, smaller companies especially don't usually contribute to dependent costs because it's just too darn expensive. But usually, a 'cafeteria plan' (aka premium only plan, Section 125 plan) is set up to allow the pre-tax payment of employee costs, thereby lowering the taxable income to the employee, and lowering payroll taxes to employers. Presumably, this will go away too. This will increase the costs to the employee, take away money from your family, and so on.

Check out this article written by Janet Trautwein, CEO of the National Association of Health Underwriters, the national arm of my professional organization on the impact of this. Agents, aren't just in this for the money, we're looking out for the consumer, our clients, as well. Keep an eye out for this, we may need some letters written.






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