I need this explained - the healthcare insurance reform - what I heard today on Hannity did not sound good.
It isn't.
As I understand it, here goes.
All employer contributions to health insurance premiums would be considered taxable income. However, an additional deduction would apply based on your status. For single taxpayers, a deduction of $7500 would apply, and for families, a deduction of $15000 would apply. The only way taxes would be raised is if you pay more than $7500 per year for a single insurance plan or $15000 for a family plan. To put that in perspective, the average family plan costs about $11000 and the average single plan costs about $4500.
If you're paying additional taxes, then one of the following must apply:
1) You have the world's best health plan;
2) Your employer does not care what the health plan they provide costs;
3) Your employer did not bother to negotiate a worthwhile price;
4) You did not attempt to shop around or pick a cost-effective plan.
It affects those with high-priced health plans. I understand the net goal of this is to encourage people to shop around and choose lower-priced health plans, ultimately bringing down the cost of health care. Also, if I'm correct, there is a financial incentive for getting under that cap limit (the deduction applies whether you spend $7500 on health premiums or not).