With the dream of eliminating the deficit dominating the thoughts of the country and our national discourse, an old idea has resurfaced with a fresh face. The idea is simple: reduce or repeal the tax subsidies on employer healthcare plans. Fewer employers will offer health insurance to their employees and more workers will have to find their own coverage. The benefit: increased government revenue.
This idea was discussed earlier this year, during the debate over healthcare reform, and then it was thoroughly squashed by pressure from labor unions and similar groups. The idea is back, however, and it seems to be gaining support.
Advocates argue for more than just pinching government pennies. They say reducing the prevalence of employer healthcare will lead to Americans being frugal and savvy shoppers for healthcare. The new health insurance exchanges that will come about in 2014, under provisions of the Patient Protection and Affordable Care Act, are hoped to augment this process. Supporters further argue that employers who didn’t pay for their employees healthcare could offer those employees higher salaries.
Detractors frame this as an attack on a foundational middle class institution.
For more on this or other tax issues, please contact the Chicago tax lawyers at Horowitz & Weinstein.