Labor & Employment Law

Fix Health Care Right?Don?t Tax Benefits

By Seth Michaels

We’re continuing our campaign for real health care reform with a new AFL-CIO TV ad that sends a clear message: “Pass Health Care. Don’t Tax Health Benefits.” The ad, which started running in key markets around the country over the weekend, emphasizes that taxing benefits will lead companies to cut benefits and will shift cost burdens to families that can’t afford it. It urges Congress to pass health care reform all Americans can afford.

The Senate’s health care bill would set a tax on health plans worth more than $8,500 per year for individuals and $23,000 per year for families. For workers in high-risk occupations, for retirees 55 or older and for residents in the 17 highest-cost states, the bill would tax plans worth more than $9,850 for individuals and $26,000 for families.

This would amount to an enormous tax on workers’ health care benefits, one that would grow rapidly, as insurers increase premiums by an equivalent amount. It would shift health care costs onto the backs of workers?including many of the most vulnerable workers?without bringing down the cost of health care.

Here’s a fact sheet on why this new tax on middle class families’ benefits will hurt workers. This policy could:

• Increase premiums, cut benefits and raise out-of-pocket costs for middle-class families.
• Hurt one in five workers by 2016.
• Punish workers who are older, sicker or in dangerous jobs.
• Hit workers whose plans are more costly not because of extravagant benefits but because of the kinds of work they do or where they live.

There’s a right way to pay for health care. The House passed a better, fairer reform bill, and it’s paid for by a surtax on the very wealthiest earners-the ones who benefited from big Bush-era tax cuts for the rich.

We need health care reform-but we shouldn’t hurt middle-class workers and their health benefits in the process. Contact your Senators and ask for real reform.

Full post as published by AFL-CIO NOW BLOG on December 07, 2009 (boomark / email).