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How confident are U.S. health insurers that Congress won’t touch the federal income tax exclusion for employer-sponsored health benefits?
Not very.
America’s Health Insurance Plans (AHIP), a group for health insurers, hinted at its concern in early October by posting a primer with the title “5 Things You Need to Know About Employer-Provided Coverage.” The colorful infographic starts with the message: “Over 180 million Americans rely on employer-provided coverage for affordable access to care, effective ways to improve health, and financial security.”
The infographic ends with a section on protecting employer-provided coverage. “Some lawmakers have proposed changing the current tax treatment of employer-provided coverage,” the infographic says. “A strong majority of voters (63%) support the current tax treatment of employer-provided coverage. Most do not support taxing employee health benefits (only 28% support).”
AHIP emphasizes the point that health benefits’ current tax exclusion could end by including a separate illustration with the caption “63% support the current tax treatment of employer-provided coverage.”
The United States generated $5.1 trillion in on-budget and off-budget revenue in 2024 and spent $6.9 trillion, producing a deficit of $1.8 trillion. Federal budget analysts have estimated that the rules excluding employer-provided health insurance from taxation cost the government $231 billion in revenue. The health benefits exclusion is the most expensive item on the analysts’ list of “tax expenditures in the income tax.”
Health insurers and employers contend that the exclusion has been a low-cost way to encourage employers to provide high-quality coverage for most full-time, year-round workers and their families.
AHIP created the infographic program as part of its Coverage@Work campaign, which is aimed at policymakers and the general public. The campaign “advocates for market-based solutions that advance health, choice, affordability, and value for every American.”
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From: BenefitsPRO
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