Mummy in the foothills

So I figured I could get more sense out of you lot (I'm probably dreaming )
So whats this about the government will now tax our health care benefits that the company pays for?
So other ladies I talk to were ranting about it, to tell the truth, I hate to ask them too much they get very judgmental and condescending. So I thought I'd ask here.
This was the article they were going on about, and how the unions have avoided this tax for their workers.
So are you all affected and will you have to pay more because of it?

Moonshadow_Girl

While I don't know everything about the health debate, what I can tell you is that if you pay any part of your salary to medical benefits, what you pay is currently deducted from your salary before you are taxed on the remainder of your pay, so that you are taxed at a lower amount. What it sounds like this article is saying is that to pay for the health reform, the government will now start taxing what you pay, from your check, towards medical benefits. For example: Right now you earn $1000 every two weeks. One of your deductions is $200 for your contribution for your health care. Your $200 is deducted before the government taxes your salary. In essence, instead of being taxed on $1000, you are being taxed based on your $800 remainder of your salary.

What the government is proposing will be tax your entire $1000 to help offset costs of health reform. The article is saying that those that are members of a Union, with "Cadillac plans" ie. exceptional health plans, will be exempt from the taxation until 2018.

That's what I got out of it though. I'm sure others can fine tune this. FWIW, this is probably the first time in a long time that I can say that I'm glad to be in a Union, having had a hate/incompetence relationship with mine... lol I happen to be part of one of those government unions that includes a disproportionate amount of older women with a Cadillac health plan.

Tegwyn

The company my husband works for is considering dropping their cadillac plan and taking on the government one should it be implemented. They have determined that the cost to them would be far too high, never mind the cost to the employee. I think you will see many companies follow suit which will in fact dump the revenue source the government is hoping to milk.

penguinsix

First, nothing is set in stone just yet. There are two bills and they need to be worked into one unified bill and then voted on.

Here is a good explanation of what is or is not a Cadillac plan

http://www.slate.com/id/2232434/

Mummy in the foothills

We are in a Union too and have one of those Cadillac plans. My worry is once they start taxing it all, it will include what the company pays out. We don't pay out anything towards the plan each month, just the deductible and co pays when we use it. I can't imagine paying tax on another $20,000 a year that we have no choice in spending and never get to see.
First time in 25 years we have a decent cover and now this

md95065

I always find the term "cadillac health plan" amusing and rather ironic since, for me at least, it conjures up an image of something big, ugly, expensive and unreliable manufactured by a bankrupt company that was bailed out by the US government with billions of dollars of tax payer money.

Quite appropriate actually

Tegwyn

Yup, agree with that. It really is a matter of anyone having a good health insurance plan needs to be bashed over the head financially and made to feel like hell for having it. My son is uninsured so am fully aware of the consequences for him, and my daughter will be off our plan once she completes this last term of Uni so we know what we have to do to help her. Still feel like we will be penalized because we do have good health insurance. Something has to change but I am so against them rushing through something purely for the sake of doing it. There are going to be so many lawsuits plugging the system as it stands now that the only winners in this indefinitely will be the lawyers. The very fuggers that have made our health care so very expensive in the first place. If all those prizes in Washington had begun with tort reform, then I would believe we have headed in the right path of forcing change.

Bluegrass Lass

From what I understand, this all comes down to what your employer is paying for your health plan?? I really have no idea what it costs my employer annually, all I can tell you is how much my monthly premium is. It's kinda unfair to tax me on something that I can't change. I can't tell my employer to stop paying so much.

As soon as a public option was removed, this bill was essentially worthless. They are basically forcing something through for the sake of saying they passed a bill - despite the fact that all it does is not a damn thing.

Giantaxe

Nonsense. The whole system is biased towards company-provided health insurance, and that's perhaps the biggest flaw with healthcare access in this country. Employers currently get to deduct the cost of health insurance provided to employees whereas individuals typically don't. Plus people with individual policies are subject to a whole raft of insurability/cost issues that those that are on an employer-provided group plan aren't. Imo, a bold reform would have removed the tax-deductibility of employer-provided insurance entirely in addition to taking other steps to level the playing field between group and individual policies. Of course, this wouldn't have been politically possible as the current system of employer-provided insurance is too ingrained.

Like me, you're (indirectly) effectively receiving subsidized insurance by virtue of the tax-deductibility to your employer of the cost of health insurance.

Giantaxe

From the article:

"Under the plan to help fund health-care reform, the tax would kick in for plans valued at $8,900 or more for individuals and $24,000 or more for families."

So if your spending is under those limits, there is no impact from this. If your spending is over these limits then _your insurance company_ is subject to the tax. It seems a very strange way to raise revenue, but given Americans' aversion to the word tax, I presume this was deemed more politically possible than other approaches.

Giantaxe

I disagree. It actually does quite a lot of useful stuff in terms of insurability/costs/subsidies for people on individual policies or who currently cannot afford any insurance and goes some way - but not far enough! - to level the playing field between group and individual policies.

ian1976

I think this is just the first step. They actually need to get something through. Provisions such as capping premiums, removing lifetime maximums and forcing insurance companies to cover people with pre-existing conditions are actually the first steps to destroying the private healthcare business in this country. A good thing IMO as it will force alternatives like a public option to be created - the caveat here is that it may take many years.

Allowing health-care premiums and other costs to be tax deductible just enboldens insurance companies and providers to charge more IMO.

chartreuse

That's disingenuous, to say the least.

Any individual's spend is only part of the value of their health plan. There's also the employer's spend to consider, plus whatever crazy scheme they come up with to calculate how they value the plans (anybody really think it'll be as simple as "You pay $X, your employer pays $Y, so your plan is valued at $X+Y?).

Then of course, you ignored the other main point of the article - which is that unions and other administration cronies will be exempt from the effects this tax.

And, finally, so what if it's the insurance co that has to hand the tax over to the govt? Walmart has to pay sales tax, but it doesn't stop them charging it on to their customers.

Giantaxe

By "your spending" obviously I meant the "spending on you" including what you pay and what your employer pays - all of which is likely to be tax deductible under current law to the individual or the employer.

Odd, other than noting it's a very strange way to raise revenues, I was reporting facts rather than expressing opinions in that post

Personally, I prefer the House bill's approach to this in taxing those who make more than $250k (?) to fund this. But I don't think such an approach will garner 60 votes in the Senate. And what would be the best solution - removing the tax deductibility of employer-provided insurance - is simply a political non-starter. Essentially, one could view the Senate's approach as an awfully convoluted way of removing the tax-deductibility of the part of health insurance costs over a certain threshold.

chrisfromusa

I've been kind of following the healthcare debate and from the start I've been supportive of it, but then the secret meetings started and it just kinda fell off from there. I'm torn apart about it, because I'm not sure if I would want a NHS style system in the U.S. My girlfriend tells me the hospital in Slough (not the only one in Slough but let's use that as an exmaple. Btw that'd be in Windsor and Maidenhead) is pretty filthy and you could probably get MRSA staying there. Government forced to cut its budget and outsource it's maintenance operations to private companies and not holding them accountable. Well we're having a budget crisis in the US, and the US government isn't exactly the world's best manager of programs so that puts me off.

I think with what we have they could have done plenty more. Yes it's noble banning denials for pre-existing conditions and banning being denied treatments, but I think one loophole I found, was that then the insuance companies can charge higher rates, either passing it down through to us, or charging the government more. And whent he government has gotten involved in subsidizing (like higher education for example) the price just ridiculously inflates and why shouldn't it? It's a good business move to do so. I think we should have like car insurance, where you have all insurance companies across the country competing for your business, instead of only the 1-3 companies in your state. There's a start, I think