New studies show heavy impact of benefits tax

A tax on health benefits, now being debated in the Senate, would result in benefit cuts and higher out-of-pocket costs, according to two new reports by actuarial and benefits consulting firms.

"The impact of the new tax would fall disproportionately on Americans who already face higher out-of-pocket costs," said a report by the consultants Watson Wyatt Worldwide.  "These include people who live in high-cost areas, women (whose costs are higher than men), older Americans (whose health care costs increase with age) and people suffering from chronic diseases."

The proposed tax on benefits would apply to health insurance with high premiums, sometimes called "Cadillac plans," in the belief they offer rich benefits.  But, Watson Wyatt found, "The premise that high costs occur only in Cadillac plans is wrong. The new tax would also apply to plans whose members have greater health care risks and needs, and also those who live in high cost geographic areas."

Another consulting firm, The Segal Company, found that more and more health insurance plans would be subject to the tax over time, as health costs continue to rise. Segal studied 38 large multiemployer health plans, and estimated that family coverage would be taxed in only 11% of plans initially, but would rise to 61% in a decade.

That's why CWA is asking members to call 1-888-580-0792.  You'll be connected to the office of your senator so you can say: Don't tax our health benefits.