Proposals to tax health benefits, sometimes touted as a way to help reduce the deficit, could have unintended consequences, according to a survey by the Employee Benefit Research Institute.
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More than half of American workers indicated they would look for a cheaper health insurance plan or even drop coverage if Congress decides to tax workers' health benefits. The proposal, a possible means to pare the federal deficit by raising revenue, was tested by the Employee Benefit Research Institute in its 2012 Health Confidence Survey. If the value of employment-based health benefits became taxable, 26 percent surveyed said they would switch to a less costly plan, 21 percent said they would want to shop for coverage directly from insurers, and 9 percent said they would want to drop coverage. Thirty-nine percent said they would continue with their current level of coverage (Stafford, 12/20).
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More than half of American workers whom the Employee Benefit Research Institute surveyed would switch to a less costly health benefits plan, shop for others or drop coverage altogether if the government began taxing health benefits. The nonpartisan group's poll found that 26 percent of workers getting employment-based insurance would find a cheaper plan, 21 percent would shop for coverage directly from insurers and 9 percent would drop coverage if health benefits were taxed. Four in 10 of the respondents said they would stick with their current plans. Lawmakers have considered a number of proposals over the past few years that would tax health benefits to help pay for the health care overhaul or fill revenue gaps (McGlade, 12/20).
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.