Under the Senate plan to overhaul our healthcare payment system, small businesses may end up with no choice but to adopt a public "option."
Beginning in 2013, all plans that cost more than $8,000 for individuals and $21,000 for families would be subject to the high cost plans tax of 40%. Since small employers face higher premiums due to their smaller risk pool and weaker bargaining position, this tax would hit them particularly hard.
In addition to adding new taxes to the cost of health insurance premiums, the Senate Finance Committee's current version of the bill would place a $2,500 cap on FSA plans, beginning in 2011.
Senator Sam Brownback describes an additional feature to this plan in a report issued yesterday:
So much for a new age of transparency in government.
Beginning in 2013, all plans that cost more than $8,000 for individuals and $21,000 for families would be subject to the high cost plans tax of 40%. Since small employers face higher premiums due to their smaller risk pool and weaker bargaining position, this tax would hit them particularly hard.
In addition to adding new taxes to the cost of health insurance premiums, the Senate Finance Committee's current version of the bill would place a $2,500 cap on FSA plans, beginning in 2011.
Senator Sam Brownback describes an additional feature to this plan in a report issued yesterday:
"The FSA cap would not be indexed, so the value would quickly diminish over time. Within just the first ten years, the value of a $2,500 contribution would fall to less than $1,700, meaning a greater percentage of families' out-of-pocket costs would be subject to taxation. And for individuals who currently contribute more than $2,500, the cap would translate to an immediate tax increase. For a family with taxable income of $66,000 that had contributed $5,000 to a health care FSA, the $2,500 limit would result in a federal income tax increase of $625 and a payroll tax increase of $191 - a total tax increase of $816."Using hidden tax traps like these are clearly meant to force employers and their employees into a federal healthcare payment system by driving up the cost and limiting the benefit of private plans.
So much for a new age of transparency in government.
Are you kidding? "Using hidden tax traps like these are clearly meant to force employers and their employees into a federal healthcare payment system by driving up the cost and limiting the benefit of private plans." At $500 a head, for two employees plus myself, I'd say that's equivalent to a hidden tax trap except I KNOW a good chunk of the $500 goes towards some CEO's mansion and golden umbrella. I'd gladly take a public option. That way people STILL have a choice to follow preventive/healthy lifestyles...or not.