March 2009 | EPI Working Paper #281
Who is Adversely Affected by Limiting the Tax Exclusion of Employment-Based Premiums?
by Elise Gould (Economic Policy Institute) and Alexandra Minicozzi (Congressional Budget Office)
Our analysis of the 2005 Tax Reform Panel’s recommended cap on the employer exclusion predicts that the percentage of older workers, average wage, percent female, firm size, nonprofit status, and degree of worker unionization are important factors in determining who would be affected. In addition, in a static model, indexing the proposed cap by overall inflation results in more than doubling the number of enrolled employees with tax-preferred premiums in excess of the cap from the first to the 10th year.