That is obviously, extremely unfair taxation on disabled who must continue health insurance coverage due to pre-existing conditions. This discrimination is enhanced by other Illinois regulations that allow insurer to exclude from basic pay, health insurance premiums. But yet, income that is not considered income, by State Regulation, suddenly becomes taxable income when I became disabled. That discrimination, which is called inherently wrong by National Taxpayers Union, extremely unfair by one tax lawyer, with another tax lawyer saying I am being screwed, and IRS personnel saying it is wrong to tax health insurance benefits without allowing reductions for re-imburse of covered cost. It does not follow Federal tax code, which Illinois Insurance Department says it should.
Federal code provides for reduction of covered cost as Itemized deduction.
After that comes taxation without representation, legislation. Retirement benefits, not taxed in State to others, becomes taxable when tax collector changes interpretation of code that requires instructions, that have existed for 17 years to be changed. Instructions that imply intent of previous tax code to exclude disability plan benefits from taxable income. Since it seems, from your last sentence, that you now realize the code or interpretation is faulty, I am asking that you help in correcting it, instead of defending it. It would be a simple legislative change to add long term catastrophic health disability plan benefits, for all citizens, to tax code.