WILL YOUR COMPANY-PAID HEALTH CARE BENEFITS BE TAXED?

July 8, 2009

We may be seeing a textbook example of double-talk coming out of Washington concerning the future of health care. We've been told by the President and his spokespeople that, "If you're happy with your current insurance company, you'll be able to keep it". This rhetoric is to placate those who fear the Federal government's health care plan will totally replace the coverage they currently enjoy.

Their statement may be true, but the untold part is the "other shoe" dropping and that "shoe" would be the painful part of keeping your current coverage. If you are employed/retired and your employer currently pays your health insurance premium AND you choose to keep your current coverage, the Federal government (and probably State also) may decide this "paid insurance" is actually "income" and, of course, taxable. I say "may" tax the benefit, but with the critical nature of our Federal and State economies, do we really think the Feds or State governments would pass-up an opportunity to pull more money into the coffers?