Congress May Require Individuals to Help Cover Cost of Health Care Reform

• Published in: Executive's Tax & Management Report Vol. 72; no. 8; p. 4
• Main Author: Massey, Bart
• Format: Trade Publication Article
• Language: English
• Published: Riverwoods CCH INCORPORATED 01.08.2009
• Subjects: Congressional committees; Cost control; Donations; Employers; Executives; Federal employees; Federal legislation; Health care expenditures; Health care policy; Income taxes; Presidents; Reforms; Tax deductions; Tax increases; Tax planning; Tax reform; United States > US
• ISSN: 1098-1594

The Senate Finance Committee has taken the lead in developing health care reform legislation, and its chairman, Sen. Max Baucus, has stated his desire to pay for reform, primarily through changes in the health-related provisions of the IRC. Of significant interest to the chairman is a provision to modify the current exclusion for employer-provided health benefits. President Obama has also targeted higher-income individuals as a possible source for revenues for paying for health care reform. He proposed limiting the benefit of itemized deductions for higher-income individuals to that provided by a deduction in the 28% bracket. One House proposal would hold individuals responsible for obtaining and maintaining acceptable health care coverage. Those who do not would pay a tax equal to 2% of adjusted gross income over their income tax return minimum income filing threshold. Employers should begin considering how the various proposed modifications of the exclusion for employer-provided health care would affect the benefit packages they offer to employees.