If you’ve opened your W-2 form already, you may have noticed a new dollar figure on it: the total cost of your health benefits.
You’re not alone. This year for the first time, large companies are required to print the cost of their employee’s health-care benefits on the tax form.
The measure was written into the Affordable Care Act and is meant to make employees aware of the full cost of their health benefits.
Many people already know what their monthly health insurance premium is.
But the true cost of employer-based health insurance is typically more than three times what’s deducted frm a worker’s paycheck — an average of $15,745 for a family in 2012, according to the Kaiser Family Foundation. The annual cost for an individual’s health benefits was $8,003.
Larry Levitt, executive director of the Kaiser Initiative on Health Reform and Private Insurance, said many people do not realize that.
“The idea here was to help people understand how expensive health insurance really is, and that might lead to some changes in behavior over time,” Levitt said.
What kind of changes? Levitt says he would expect them to be subtle, if any materialize at all.
“Some people may choose to forgo health insurance if they have it available through a spouse,” he said.
Or, in collective bargaining, employees may be willing to accept slightly less generous health insurance benefits in exchange for higher wages.
University of Pennsylvania medical professor Kevin Volpp is skeptical the rule will have much of an impact.
“I suspect that people won’t really notice that that information is there,” Volpp said.
Volpp is head of the Center for Health Incentives and Behavioral Economics at Penn.
He said push for transparency is good, but a once-a-year reminder of the high cost of health care does not tell consumers how to help lower those costs.
The rule does not mean that health benefits will be taxed, as some have proposed.
Businesses with fewer than 250 employees are exempt from the reporting requirement for now.