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Don’t believe what you read online, especially about health insurance

November 1, 2015

This hit me as a shocker today when I Googled the term “taxation of health insurance benefits”. I found that every reference on the first page of the Google listing, excluding the two IRS web site references, either contained errors or the advice was out-of-date and now incorrect.  (IRS web pages have been known to contain errors. I did not read these specific pages and I presume them to be accurate). IRS has issued multiple warnings that is aware of false or misleading information promoted by firms that are selling insurance products or benefits management software.

Some examples of problematic published information that ranked high in my Google search:

An Ameriprise article at https://www.ameriprise.com/research-market-insights/tax-center/tax-planning/taxation-of-health-insurance/ is out of date and does not reflect current law.

Intuit’s Turbotax page at https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/How-Healthcare-Reform-Has-Changed-the-Way-You-Pay-Taxes/INF12136.html stops before 2015 and does include current year advice.

At http://www.proformative.com/questions/are-employer-paid-health-benefits-taxable-2014 the CFO of Atlantic Wireless Communications makes a misstatement about the fundamental tax treatment of employer-provided health benefits It seems that a few readers caught the error. It was disturbing that she says she heard this mis-information at a professional education program.

At http://www.hrc.org/resources/entry/taxation-of-domestic-partner-benefits the Human Rights Campaign advice on benefits for same sex couples is out of date.

Forbes Tax expert Kelly Orb. Kelly Orb deals with the same issue as above, response is out-of-date at

http://www.forbes.com/sites/kellyphillipserb/2013/08/28/ask-the-taxgirl-taxing-health-care-benefits/ . While Orb is normally brilliant in her analysis and communication, I got the feeling she was not focused on the fundamental authority for this article.

I then looked at my own article titled “Taxation of Health Insurance Benefits” at http://tonynovak.com/article/taxation-of-health-insurance-benefits.htm that was first published in 2003 and last updated earlier in 2015. I expected to find errors; I almost always do when reviewing any of my aged publications. Even though I wrote the original article I now find the task of reviewing it to be overwhelming.  I made some updates mostly to make it easier to read. I presume the basic information is still accurate but that the links the article points to were not checked and are presumed to need updating. This 12-year-old article is likely too long to have any market value by today’s business publication standards.

Taxation of health insurance is clearly not a simple topic. The best advice is to get your own professional advice; don’t rely on what you read on the Internet!

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