What are the tax implications of the eComm PPO Plan and HMO? HMOs include Kaiser CA eComm, Kaiser OR eComm, and BlueCares East/SE eComm Qualified medical expenses, including health insurance premiums, in excess of 10% of adjusted gross income may be deducted on your federal and possibly state income tax return if you itemize your deductions.* EXAMPLE Assumptions Bob is single and younger than 65 Bob has enrolled in the eCommerce PPO Plan with annual premiums of $832 a year Bob’s total annual taxable income from all sources is $100,000 Bob’s itemized deductions do not exceed $6,350 Bob had some qualified medical expenses of $3,000 including medical premiums Comments Bob’s itemized deductions are less than the standard deductions, so he is better off taking the standard deduction Bob cannot deduct any medical expenses, including the expenses, because his expenses are less than $10,000 (10% of AGI) The federal and state (CA) tax impact to Bob related to paying post tax premiums is $285. BOB’S TAXES Income (AGI) $100,000 Personal Exemption -$4,050 Standard 2017 Deduction -$6,350 Taxable Income $89,600 Additional Federal Tax attributed to Medical Premiums $208 (25% TAX BRACKET) Additional CA Tax attributed to Medical Premiums $77 (9.3% TAX BRACKET) The eComm PPO plan and eComm HMO plans, which include Kaiser CA eComm, Kaiser OR eComm, and BlueCares East/Southeast eComm, premiums are paid after tax due to IRS regulations. This means federal and state taxes are deducted before their medical premiums are deducted. To give you an understanding of the impact, let’s take a look at Bob. Bob is single and under 65. He has total annual taxable income of $100,000 and paie $832 for the year in eCommerce PPO Plan premiums. His itemized deductions do not exceed $6350 and he had some qualified medical expenses of $3,000. Bob’s itemized deductions are less than the standard deductions, so he is better off taking the standard deduction. He cannot deduct his medical expenses of $3,000 because they are less than 10% of his taxable income or $10,000. Take all this into account and Bob will have a tax impact of $285 due to having to pay his eCommerce PPO Plan premiums after tax. We suggest you reach out to your tax advisor to learn more about tax implications for your specific situation. EXAMPLE BASED ON 2017 TAX RATES * Please reach out to your tax advisor to learn more about tax implications for your specific situation.