Maybe you have received the email or heard the rumor going around that the new health care law is going to make your employer provided health care benefits a taxable benefit in the future. I know I have personally heard this rumor many times from different clients or acquaintances.

Well fortunately it is FALSE. The new health care law does require that your tax free benefits be printed on your W-2, but it is for informational purposes only, and not as additional income. It would be similar to the way your employer reports the retirement contributions on your W-2. It's purpose is twofold (as far as I can tell).

1. It proves to the IRS that you are covered under a health plan, and that you are not subject to the penalties that are assessed against the uninsured.

2. It proves to the IRS the value of your employer benefits, becuase insurance companies that provide high dollar "Cadillac Plans" will have to pay a tax beginning in 2018 on those plans. Note the insurance company pays the tax, not the employee (but don't kid yourself if you don't think that cost won't get passed on to the customer).

So the good news is that this benefit will continue to be a tax free benefit (as long as employers can afford to provide it). The bad news is that employers and payroll preparers will have a new task each year as they prepare the W-2 forms.

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