Looming tax reform spells trouble for employer-sponsored plans

Calculator on top of spreadsheet of financial calculations.

Healthcare insurance exemptions are expected to be a primary target for impending tax reform legislation, which could prompt some employers to reconsider sponsored health plans, according to Business Insider.

House Republicans have already proposed the “World’s Greatest Healthcare Plan” that would limit tax exemptions at $2,500 for individuals and $1,500 for dependents.  A task force led by House Speaker Paul Ryan (R-Wis.) is also expected to include exclusion caps on employer-sponsored health plans.

But industry experts told Business Insider that reducing tax exemptions would prompt many employers to reconsider sponsored health plans, forcing more consumers into the public exchange. Although some employers may keep their health plans in an effort to retain employees, additional costs are likely to be split between employers and employees.

“In a lot of industry sectors where revenues are not matching heathcare expenditure costs, any disincentive is going to lead to many employers dropping their plans,” Steve Wojcik, vice president of public policy at the National Business Group on Health, told Business Insider.

A report published by the Congressional Budget Office in February found tax exclusions for employer-sponsored coverage cost the government $250 billion in 2013.  

- read the Business Insider article