Is Bush proposal to add health costs to W-2 a good idea? Perhaps so.
By Dave Tate, CPA, Esq. - Rob Nance, Publisher of AccountingWEB, passed around a news announcement that President Bush has proposed to add a box for health insurance costs to the W-2 form. The employer would report the cost of health insurance that the employer has paid on behalf of that employee. The administration is concerned about the lack of transparency, and how that might impact health decision making. The intent is to make the employee aware of the value of the coverage, which may result in the employee making better health coverage and care decisions.
I don't know whether adding a box for employer health insurance payments is a good idea or not. What do you think? I tend to believe that the W-2 should be used for information that is needed for tax compliance purposes, not for social policy. On the other hand, if we are going to go down the path of using the W-2 to disclose payments that the employer has made relating to the employee, and if we want transparency, we can probably think of other amounts that should also be disclosed. How about . . . the amount of matching social security, and other "taxes," fees, etc. that the employer pays specifically with respect to each employee? I believe that many people might be surprised by the true amount of the total cost. Yes, more transparency might very well be a good idea.
Just my thoughts.
Dave Tate, CPA, Esq.