Cadillac health insurance tax--Bill to contain special exemption for union members?
This development may be of interest to any board members who are in a union: In the latest twist, the White House and the select group of legislators negotiating the merged version of the health care legislation have reportedly reached a compromise regarding the proposed tax on "Cadillac" health plans. As before, the value of these plans exceeding certain limits will be taxed at 40% starting in 2013. The compromise is that if the insurance is part of a collective bargaining agreement (i.e. part of a union-brokered contract), a Taft-Hartley multiemployer plan, or part of a state-employer plan, then the tax will not go into effect until
2018. I assume the unions will use the time to renegotiate these contracts and have the compensation moved into other areas rather than health care.
Additonal info is
here.
For anyone else who has a generous health care plan through your employer (i.e. you negotiated it independently one-on-one, or you selected it as part of a benefit package, or you are a non-union employee and the employer has always offered these plans to you)--no special deals. Sorry, you are not part of a favored, protected group and so you are a "bill payer."
Of course, as time goes by, there will be virtually no government revenues due directly to this tax. Employers and employers will shift compensation to avoid it. The government revenues will come from other taxes that people pay as they try to
avoid this tax. From
Bob Herbert's NYT column of a few weeks ago:
If even the plan’s proponents do not expect policyholders to pay the tax, how will it raise $150 billion in a decade? Great question. . .
According to the Joint Committee on Taxation, less than 18 percent of the revenue will come from the tax itself. The rest of the $150 billion, more than 82 percent of it, will come from the income taxes paid by workers who have been given pay raises by employers who will have voluntarily handed over the money they saved by offering their employees less valuable health insurance plans.
With the revised carve-outs for union plans, the government now expects to bring in "only" $90 billion , not $150 billion, over the arbitrary 10 year window. So someone else (. . . "that man behind the tree!") will be making up the difference.
The hits just keep on coming!
Just become a grasshopper and let the ants feed you. It's easier this way.
