Senator Baucus's Excise Tax on Health Insurance will harm Federal Employees

Wednesday, October 21, 2009

(Council 26)

The Senate Finance Committee (SFC) passed a health care reform bill that includes a provision to tax many health insurance plans and essentially, tax the middle class. The Federal Employee Health Benefit Plan (FEHBP) will be affected in future years if the Finance Committee bill becomes law. Currently, Congressional leaders are working to marry health reform bills passed by various committees of jurisdiction. AFSCME International is working with other federal Unions to oppose the excise tax and fight to keep it out of the final health care reform bill. International AFSCME President Gerald McEntee has emerged as a leader in the fight against taxation of employee health benefits.

 

The Joint  Economic Committee   has developed a chart which indicates when FEHBP plans will be taxed under the SFC bill.  The table includes impact of Flexible Spending Accounts (FSAs), but does not specify dental and vision coverage.  If vision and dental are included the date in which FEHB will be taxed moves up.  Under the table, Blue Cross Blue Shield standard Family with a $2500 FSA gets taxed in 2017 and Blue Cross Blue Shield individual with a $2500 FSA gets hit in 2013.  The SFC bill caps the FSA at $2500 starting 2011.  The chart indexes annual premiums by 6.1%. Click here to see the chart.

 

 

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