That New Box On Your W-2 (and Why You Should Care)

Takepart.com

If you get health insurance from your employer, first, congratulations—you’re one of the lucky ones. If you're among the fortunate, you may have noticed a new box on your W2 form, which you should have received from your HR department by January 31.

The form, which details your salary, expenses, and benefits, has some new information starting in 2013: Specifically, take a look at Box 12, "DD," on your W2. It's part of a new regulation courtesy of the Affordable Care Act (ACA)—aka Obamacare—that shows how much you and your employer each contributed to the cost of your health insurance. You don't need to do a thing with the information—other than pay attention to the zeros.

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"Most people probably will be surprised at how much their coverage costs," says Steve Wojcik, vice president, public policy at the National Business Group on Health, a Washington, D.C. group that advises large firms on health issues. Wojcik and others say most people are usually only aware of the portion they pay out-of-pocket, which can be in the thousands even if you're only paying for yourself.

But according to the Kaiser Family Foundation, which tracks health information policy, average premiums for employer-sponsored health insurance cost employers $5,615 a year for single-person coverage and a whopping $15,745 for family coverage. The average amount paid by the employee (the out-of-pocket cost) for family coverage was $4,316; for a single person it was $951.

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Neither your share nor your employer's share is taxable, though some advocates worry that breaking out the numbers on forms filed with the government, as W2s  are, could make it easier to tax health insurance in the future. Here are some reasons why Box 12 is included on your W2 now.

• To make people aware of how much coverage costs;

• To give people who get employer coverage numbers they can use to compare their costs against what they’d have to pay if they opt for coverage under the state health insurance exchange everyone will have access to early next year;

•To help the Internal Revenue Service verify that you have coverage, a requirement for most people in the U.S. under the ACA; and

•To help identify people opting for the most luxurious health insurance plans, which become taxable in 2018.

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In other news, the Department of Health and Human Services recently relaunched its ACA website, Healthcare.gov, which has lots of good information about the changes the Affordable Care Act will bring. 

Were you surprised to see how much your company pays for your health insurance? Or do you have to pay for your own health coverage—or do you go without?

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Fran Kritz is a freelance writer specializing in health and health policy and lives in Silver Spring, Maryland.

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