According to Larry Coon, a cap guru, Jerome James’ contract could be excluded from the Bulls luxury tax calculations.
For the first question — the salary counts. It doesn’t matter whether insurance is paying it. The team can apply to have the salary removed, after a year waiting period.
For the second question — the Board of Governors can exclude the salary of disabled players from the luxury tax, and typically does so.
This would be huge for the Bulls, as it would give the Bulls’ much more room to operate under the luxury tax, allowing them to re-sign Ben Gordon without making any major moves.
Of course this is all dependent on Jerome James having to medically retire.