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Re: As much as I don't like Obamacare.... [eb] [ In reply to ]
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eb wrote:
dave_w wrote:
one thing I did not like hearing floated is a tax on employer provided plans to help generate revenue.


Initial drafts of ACA were going to remove the tax-exempt status of employer-provided plans. That foundered largely due to labor unions, who argued that many of their contracts are negotiated for several years, and that suddenly taxing negotiated benefits would be unfair.

From a purely selfish standpoint, I'm worried about this too, since I have a very expensive employer-provided plan.

I do think it would be a good idea (in the long run) to make employer-provided health benefits taxable. But it's got to be done gradually and predictably so that employers and the labor market can adjust in a predictable tax environment.

It's funny because one part of Trump's health care reform proposal is to make employee contributions tax deductible. Not sure if he means deductible via Schedule A or elsewhere but either way, it wouldn't help people who can't afford health care since their tax is already very low or zero. It would be weird, to say the least, if they taxed employer contributions but gave a deduction for employee contributions.

Making employer contributions taxable would really shake things up and probably make HSA's combined with a high deductible policy a lot more popular.
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