Print
E-mail
Share
digg
Newsvine
Facebook
Stumble
Technorati
reddit
Fark
twitterTax on ‘Cadillac’ insurance plans could snare hotel maids
Highly paid executives aren’t only ones with costly coverage
Sunday, Oct. 11, 2009 | 2 a.m.
Sun Archives
- Is Harry Reid moderate on health care, or keeping powder dry for final fight? (10-4-2009)
- What cuts in Medicare would mean for seniors (10-4-2009)
- John Ensign scores win with health care amendment (10-1-2009)
- John Ensign: Public option would be popular, so let's not do it (9-30-2009)
- Harry Reid: 'I make no apologies' on Medicaid deal (9-30-2009)
- Protesters decry GOP stance on health care reform (9-29-2009)
- Bigger premium discounts seen as a reward -- and a problem (9-27-2009)
- Harry Reid: Public option trigger 'pretty doggone good idea' (9-25-2009)
Sun Blogs
Beyond the Sun
- The Wall Street Journal: Majority Of House Dems Oppose Tax On "Cadillac' Health Plans (10-6-2009)
- Politico: House Dems, labor, battle plan to tax benefits (10-6-2009)
Shelley Berkley
Dina Titus
Washington — Several years ago, when the powerful Culinary Union was negotiating new contracts on the Strip, its workers decided to forgo an initial pay increase to preserve their health care benefits.
The union offers its workers, who clean hotel rooms and work in casino restaurants, a great benefits package by many measures — workers pay no premium from their paychecks for a policy that covers themselves and their families.
Now, under the health care reform plan being debated in the Senate, those benefits could eventually be taxed to help raise money to cover the uninsured.
The proposed tax on insurers providing the so-called Cadillac health care plans would hit employer-provided policies that cost more than $8,000 a year for an individual or $21,000 for a family.
But as a New York Times headline read a few weeks ago, the proposal could also snare a few Chevys.
Higher-end policies are enjoyed not just by corporate executives, but also by middle-class union workers who have long negotiated for better benefits over pay. They’re also provided by many smaller companies, which tend to pay more for health coverage because they have fewer workers among whom to spread the risk.
The Culinary’s health benefits package costs the companies about $8,000 per full-time worker, right at the threshold for the tax and about double the average for an individual employer-offered health plan in Nevada.
Experts say any tax on the insurers, or the companies that insure workers through their own health care plans, would eventually trickle down to workers. The tax would almost certainly snare the Strip’s insurance plans as health care costs continue to rise.
As the Senate Finance Committee prepares to vote on the proposal next week, Nevada’s lawmakers are growing increasingly concerned about the Senate proposal to tax insurers that provide companies’ Cadillac plans.
Both of Nevada’s Democratic House members, Reps. Shelley Berkley and Dina Titus, signed a letter last week opposing the tax.
“A large percentage of the working men and women in Southern Nevada work with a union contract,” Berkley said. “Many of the negotiators sacrificed a higher wage for a better health care plan. To turn around and tax that now violates the contractual relationship between labor and management and goes back on a promise President Obama made that he would not increase taxes on the middle class.”
Titus, too, sees a business tax she cannot support. “Taxing insurance companies for high-cost insurance plans will only serve to place a greater burden on middle-class families,” she said.
The Culinary is not taking a position on the proposal, nor is the Nevada chapter of the AFL-CIO, which includes dozens of unions.
Throughout the health care debate, one vexing problem has been how to raise money to cover the uninsured.
Most of the nearly $1 trillion cost of health care reform will be to provide subsidies to help the uninsured buy policies they cannot now afford or to expand state Medicaid programs to provide the uninsured with coverage.
The House bills sought revenue by putting a new tax on people with high incomes.
Under the House bill, a 1 percent tax would be levied on incomes above $280,000 for an individual (or $350,000 for families), rising to 5.4 percent on families with incomes exceeding $1 million.
The Senate took a different route, narrowing in on health plans often seen as the domain of corporate executives who may enjoy gym memberships, sophisticated annual physicals or elective procedures. Taxing costlier health care plans is not only intended to raise revenue but also to lower overall health care spending by discouraging companies and their employees from using more health care than needed.
Workers have long enjoyed tax-free health care benefits from their employers — a perk that grew during World War II because of wage freezes.
Health experts believe this practice is one factor that is driving up the costs of health care: If workers have no skin in the game, they are apt to use more medical services than they would if they were paying for them.
“Individuals who have to pay little or nothing out of pocket for medical care are likely to overconsume such services,” said Leonard E. Burman, director of the Washington-based Tax Policy Center, during testimony before Congress this year.
Such a wide-reaching tax would violate President Barack Obama’s pledge not to raise taxes on those making less than $250,000 a year.
To sidestep that political pitfall, the Senate committee narrowed the concept to target only the high-end health care plans, while also proposing that the tax would fall not on the workers directly, but on the insurers (or in the case of companies that self-insure, the employers).
Under the Senate proposal, insurers would be hit with a 40 percent tax on the value of a health plan above $8,000 per person (or $9,850 for those over 55 years old, or in such high-risk fields as mining, construction and emergency services) and $21,000 per family policy (or $26,000 for families with older or high risk-workers). The tax would be on each dollar above the threshold.
Experts believe insurance companies or employers would simply pass the tax on to employees, which would reduce the popularity of the high-end plans and shift workers into less-costly policies that would bring health costs down overall.
The Congressional Budget Office estimates that the tax would raise $201 billion.
Actually, the revenue would come not from the tax itself, but from the presumed higher taxes workers and companies would pay on higher earnings, assuming that the money saved on health care as companies abandon high-end plans would be redirected to wages.
Estimates are the tax would hit one in six employer-sponsored health plans nationally, with the number growing to 40 percent in the next decade, according to the congressional Joint Committee on Taxation.
In Nevada, the average plan costs less than the threshold for the tax. The average costs of employer-sponsored health care in Nevada is about $4,000 for singles and $11,500 for family plans, slightly lower than average costs nationally, according to the Kaiser Family Foundation’s statehealthfacts.org.
Unions nationally argue that their workers would either have to swallow the tax or see their hard-fought benefits trimmed. They doubt companies would pass any savings on to workers in the form of higher pay.
Elise Gould at the liberal-leaning Economic Policy Institute said taxing the plans doesn’t necessarily reduce overall health spending as workers still need care whether they get it through their plan, pay for it out of pocket or show up at emergency rooms.
“What is a Cadillac plan? Do they cover gym memberships? At what point do we think that’s unnecessary?” Gould says. “There’s nothing to say when people move into a cheaper plan it’s a more efficient use of dollars.”
Berkley and Titus joined half the House Democrats in rejecting the Senate tax proposal, making its future uncertain as the bills from the two chambers eventually must be merged.
Nevada’s two House Democrats have been lukewarm to most of the revenue provisions in the bill.
Both Berkley and Titus rejected Obama’s initial proposal that money be raised by reducing tax deductions on mortgage interest and charitable donations for those in upper-income brackets.
More recently Titus became one of just a few Democrats to vote against the health care plan in committee because of the surtax proposed on those making $280,000 annually.
Democrats in the House have pulled away from that surtax, and are now considering taxing only those making above $500,000 annually.
Eventually, though, revenue will need to be raised if Congress hopes to expand care for the uninsured.
Nevada’s Republicans in Congress oppose the House and Senate bills.
Chuck Marr, director of federal tax policy at the Center for Budget and Policy Priorities in Washington, expects the so-called Cadillac tax will remain in some form in the final bill — perhaps by scaling it back to hit only those who are also upper-income earners.
“It’s hard to see any final bill happening that doesn’t have any version of this,” he said.
Discussion: 21 comments so far…
Post a comment
- Most Read
- Discussed
- Most E-mailed
- Wonder drug for men no success story
- CityCenter: One man’s concept of a real city
- Bellfield tolls again for UNLV in 76-71 win over Louisville
- Notebook: UNLV prospect Polee likes what he sees, and hears, at the Mack
- Man, 18, arrested for DUI in crash that kills woman, 24
- Man fatally shot during robbery attempt of woman
- Live game blog: Bellfield, UNLV come through late, upset No. 16 Louisville
- Bishop Gorman crushes Reed to head to state championship
- Pitino doesn’t consider loss to UNLV a total loss
- The ball’s in Reid’s court: Passing the public option
Blogs
The Greene Room
MWC Winners and Losers: Week 13
The Kats Report
If the message is 'rock out,' then KISS is indeed a message band (1 Comment)
Could a savior of shuttered Las Vegas Art Museum be ... Peter Max? (6 Comments)
For Paul Stanley and KISS, rock and roll is not over (6 Comments)
Twenty years ago today, Human Nature took root on the farm (1 Comment)
Robin Leach's Las Vegas Celebrity Watch
Photo Gallery: Donny Osmond’s triumphant return to the Flamingo
The Kats Report
'DWTS' champ Donny Osmond still deft afoot in return to Flamingo (9 Comments)
Calendar »
- 30 Mon
- 1 Tue
- 2 Wed
- 3 Thu
- 4 Fri
-
DJ showdown at Prive
Prive | 10 p.m. to 11:59 p.m.
-
Rok Box with Mike Carbonell at Tabu
Tabú Ultralounge | 10 p.m. to 11:59 p.m.
-
DJ Riz at Jet
Jet | 10 p.m. to 11:59 p.m.
-
Football specials at Diablo's
Diablos Cantina
The Sun
Locally owned and independent for more than 50 years.
Hey there unions enjoy your misery I am sorry but once again the little guy is getting screwed by the unions who put Obama and Reid and all the other wonderful Dems in office.
Give free benefits to the needy just make someone else pay for it. How do you like change now that your insurance is going to be taxed to pay for those without? Wait for cap and trade. They aren't going to tax you, just your utility company who will raise your bill. Government in action.
Man I wish I was in a Union and getting screwed both ways to hell your dues that do noting and your King Obama that you but in office FOR CHANGE ..... so how do I join your little get $#@% club please let me know ? Thank you for time in this matter emvance
Even though I'm a long-time culinary union member, I've always been sceptical of the union's goal of coverage for entire families with no self-pay or deductions for extended households. Now that this will be considered a "cadillac" plan, perhaps it's time the union faces economic reality and institutes modest payroll deductions for families with more than, say, two dependents. Keep the cost reasonable for the members and get the benfit under the limit to avoid the tax which we all know is coming. Additionally, this will put the union's health plan in much better financial condition and will help in future contract negotiations with the hotels.
Better than being unemployed you spoiled little union brats. Stop your whining, you could be standing in the line at the welfare office.
Dear "Doc",
My comment was not in any way a "whine"; I appreciate how fortunate I am that I'm still employed and still have health coverage. I only wish to see my union bend a little with the wind to avoid being broken.
I pay for my own health insurance. Why aren't the premiums deductible? Millions of corporate & gov't. employees have benefits that are untaxed. If my premiums are not deductible then employer provided health benefits should be taxable.
One day you awaken to the epiphany that governments are nothing more than colossal criminal enterprises which lie, steal and discriminate under the ruse of being socially benefiting.
: (
Here's what's missing:
EACH AND EVERY TIME -- SINCE THE BEGINNING OF THE COUNTRY -- ANY PUBLIC LAW "TAX" EVER PASSED, HAS NEVER (AND I MEAN NEVER!), BEEN INDEXED TO INFLATION OR COST OF LIVING OR "WHATEVER", AS TO WHO'S GOTTA "PAY" IT.
So... that $8000.00 Buck$ TODAY (using magical inflation math) is gonna be $6000.00, then $4000.00, then $3000.00, then $2000.00, TOMORROW.
And...you...are...gonna...pay...through...the...nose...just...like...you...always...do...
AND THESE SMILIN'-BIO-PIC-POLITICIANS KNOW THIS WHEN THEY VOTE FOR THIS DUNG.
The Shining Example of the Centuries: "Alternative Minimum Tax" (Need I say more...?)
The ONLY BRILLIANTLY CONCOCTED EXCEPTION to this is when these lyin'-through-your-teeth political-types "GET PAID" (either POLITICALLY or PERSONNALY, i.e. SOCIAL SECURITY, ENTITLEMENTS, POLITICO's RETIREMENT, GOVT. PENSIONS, etc.) for "voting" and then TAKE THE CREDIT for doing so with the same lame-o reasons like: "I voted for this because, '...it's been years since we've had any adjustments...', '...we've worked so hard...'", and a host of other likely and equally lame excuses, ad nauseum.
And then, later on down the road, to get these smilin'-politico-types to "adjust" this butt-tannin' that you KNOW is comin', they'll hoist the Flag, put their hand over their Dear Little ol' Hearts, and with a nice little grin say: "RE-ELECT ME."
YOU got it comin'. (AND you deserve it.)
_
(and as usual, the disclaimer: I whole-heartedly support inflation indexed govt payments for the Disabled, Our Military, all of those who have given their Life for Our Country, and others who have equally risen or are equally defenseless, etc., but you knew that.)
Hooray for the culinary!!!!
Dittoheads should be denied all medical care that has anything to do with government insurance or research.
Remember Rush Limpbout and Glen Peck say don't get a H1N1 vaccination. (A 25 yr old airman in Arizona just died after 48 hours of getting the flu, and he DID NOT have any other medical issues.) Are you next??????????
No skin in the game? Some of these seniors go to the doctor every time they get a gas pain.
I think these woman enjoy warm hands on their old wrinkles. Every trip to a doctor is another opportunity for those charlatans to defraud Medicare. Remember that. Every time the doctor cheats WE PAY!
so what happened unions, you elected Obama and now, you and your benefits just got screwed. this is exactly what you deserved. haven't you figured it out by now, the only thing that government is good for, is to trade one problem for another, and keep moving them around until the next idiot gets elected? then he can try to fix all of the mistakes that you made.
the sound you now hear is me laughing heartily, until the end of time...
BTW, unions, I guess that when you were playing "Let's Make A Deal With Our Own Futures", when the host said "Pick a curtain...Curtain Number One, More Pay, Curtain Number Two, Jobs for all (with no raises in sight ha ha ha), or Curtain Number Three, Great Benefits for you, all those who talk like you, look like you, smell like you, in other words YOUR WHOLE FRICKIN FAMILY, I guess you should have taken the pay increase, eh?
Than maybe you could have afforded your $3000 a month, adjustable rate mortgage, eh?
mred is here with his hate for his fellow man.
His hatred of Rush Limbaugh and Glenn Beck overwhelm his common sense.
His hate even extends to the listeners of Rush Limbaugh and Glenn Beck.
I hope mred is an atheist, because that boy is in trouble when he approaches the pearly gates...
so what happened unions, you elected Obama and now, you and your benefits just got screwed. this is exactly what you deserved. haven't you figured it out by now, the only thing that government is good for, is to trade one problem for another, and keep moving them around until the next idiot gets elected? then he can try to fix all of the mistakes that you made.
the sound you now hear is me laughing heartily, until the end of time
++++++++++++++++++++++++++++++++++++++++++
Actually thats exactly what the unions want, so now they can opt out and their union members will have to take the public option..this is just another part of this total health care conspiracy..it will happen with the car co's as well...with their unions,its been a plan all along. So, look at it this way, we will ALL be paying for the unions to dump health care, we will ALL pay so the illegals will be convered (legally)LOL.. in short we will ALL pay..for less care for ourselves, in order for others..to have it free..
OBAMA is an IDIOT. TELEPROMPTER BOY IS WAY OVER HIS HEAD.
Bush Voters are in Really Big trouble at the pearly gates.
Obama is a saint - make no mistake about that. The big money is coming out to assure that the needy are not covered and to guarantee their inflated stream of income. Public option is the right way!
a saint???? Crikey! what next? this guy (Obama) is a guddam politician, no more no less. Just another underachieving community organizer that was lucky to run after Bush.
All AMERICANS are in trouble at the pearly gates for allowing these scumbag politicians (both sides) to destroy what we stand for.
Unions are socialist!!!!!!!!! COMMUNISM AND FACISM!