"Senate plan to tax health insurance premiums would mean benefit cuts and higher costs for workers"

[Better Believe It]

Union leaders step up fight against excise tax
By Joe Davidson
Decmeber 9, 2009

Federal employee union leaders threw the second of a one-two punch at a Senate plan to tax health insurance premiums on Tuesday, saying it would mean significant benefit cuts and higher health costs for workers.

The presidents of the American Federation of Government Employees, the American Postal Workers Union and the National Association of Letter Carriers joined with the Communications Workers of America, which is leading organized labor's effort to defeat the proposed excise tax on premiums.

Their release of a report on the potential impact of the tax on federal employees with the Blue Cross/Blue Shield standard option comes one day after the Association of Federal Health Organizations issued a study with similar findings. That study, on the impact of the tax on federal health plans generally, was prepared for the Office of Personnel Management.

The tax would take effect in 2013 for total family premiums exceeding $23,000 and individual policies costing at least $8,500. These amounts include medical, dental and vision plans, and contributions to currently tax-free health savings accounts. Based on past performance, the report assumes premiums will rise 9 percent a year. With that assumption, the report says the annual tax hit for workers with the family plan would be $2,040 and $1,640 for singles.

"Such a tax will present the FEHBP with a major dilemma -- it will have to dramatically reduce health benefits in order to get the cost of its health plans below the threshold and avoid the tax, or pay the tax," according to the report. "Either way federal employees pay. They will lose benefits, have higher out-of-pocket health care costs, or face higher premiums -- or all of the above."

Read the full article at:

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/08/AR2009120804120.html

[avaistheone1]

1. We can't have guns and butter. Obama choose guns.

[OHdem10]

2. Is there some way, they can make the Insurance Companies really

pay the tax. We all know Businesses are expert at finding
ways to push their costs onto the consumer???

[bain_sidhe]

3. I've never really understood the excise tax on good plans

I mean, the problem is that too many people have really poor insurance, or no insurance. So the solution is to punish the people who have good insurance? I don't get the logic, there.