You get $3600 each year deducted from your paycheck for health insurance coverage for your family. You call your Human Resources department and find out that $3600 is just the tip of the iceberg - your company contributes another $8400 towards the cost of your insurance. This means that your insurance costs $12,000 per year.
This total amount - not just the amount you contribute through payroll deduction - gets added to your annual income. This raises your total household income to $72,000 per year.
Through Bush's healthcare proposal, you qualify for a $15,000 tax deduction. You get the full $15,000 no matter how much your family's insurance coverage costs. In this example, your family's taxable income would be reduced to $57,000.
In the example, your family comes out ahead, even though the cost of your job-based coverage is added to your income. But what about those whose insurance costs more than the tax deduction? Read on to find out.
