For Immediate release: Friday, May 6, 2011
Contact: Phoebe Silag or Karen Conner, news@epi.org, 202-775-8810

Tax on health care premiums would hurt workers

The National Commission on Fiscal Responsibility and Reform chaired by Erskine Bowles and Alan Simpson proposed taxing workplace health benefits in its 2010 report on reducing the federal deficit.  Its plan, the Illustrative Individual Tax Reform Plan, would cap the tax exclusion for employer-sponsored health insurance in 2014 and then phase it out entirely by 2038.

In Reducing the federal deficit by increasing households’ risk: Phaseout of tax exclusion for health insurance premiums leads to less health and financial security, EPI Director of Health Policy Research Elise Gould finds that a tax on health insurance premiums would shift health care costs and risks onto workers and their families, particularly those with high medical needs, and result in employers dropping health insurance coverage for their workers.